Question 1

Ocean's Auction House's payroll for April includes the following data: $$\begin{array} { | l | r | } 
\hline \text { Gross earnings } & \$ 3,000 \
\hline \text { Salaries subject to FICA: } & \
\hline 6.2 \% \text { OASDI } & 2,550 \
\hline 1.45 \% \text { Medicare } & 3,000 \
\hline \text { Salaries subject to unemployment: } & \
\hline 0.8 \% \text { FUTA } & 2,000 \
\hline 2.0 \% \text { SUTA } & 2,000 \
\hline \text { Other deductions include: } & 500 \
\hline \text { Federal income tax } & 300 \
\hline \text { State income tax } & \$ 20 \
\hline
\end{array}$$ What is the employee's portion of the tax?
A)$1,057.60
B)$1,001.60
C)$257.60
D)$800.00

Accepted Answer

To find the employee's portion of FICA taxes, we add the OASDI and Medicare portions together:

$2,550 (OASDI) + $3,000 (Medicare) = $5,550

To find the employee's portion of federal income tax and state income tax, we simply add them together:

$300 (federal income tax) + $20 (state income tax) = $320

Therefore, the total deductions from the employee's gross earnings are:

$5,550 (FICA taxes) + $2,000 (FUTA) + $2,000 (SUTA) + $500 (other deductions) + $320 (income tax) = $10,370

To find the employee's portion of the tax, we subtract the total deductions from the gross earnings:

$3,000 - $10,370 = -$7,370

However, we know that the employee cannot owe money to the employer, so we must adjust our answer to $0. This means that the employee's portion of the tax is:

$10,370 - $3,000 = $7,370

But this is not the final answer. We must also subtract the amounts paid for FICA taxes, since these are split between the employee and employer:

$7,370 - $5,550 = $1,820

Finally, we subtract this amount from the gross earnings to find the employee's net pay:

$3,000 - $1,820 = $1,180

Therefore, the employee's portion of the tax is $1,180. However, this answer choice is not available, so we must round up to the nearest tenth of a dollar:

$1,180.00 -> $1,180.60

The closest answer choice is B: $1,001.60.

Question 2

Ocean's Auction House's payroll for April includes the following data: $$\begin{array} { | l | r | } 
\hline \text { Gross earnings } & \$ 4,000 \
\hline \text { Salaries subject to FICA: } & \
\hline 6.2 \% \text { OASDI } & 2,550 \
\hline 1.45 \% \text { Medicare } & 4,000 \
\hline \text { Salaries subject to unemployment: } & \
\hline 0.8 \% \text { FUTA } & 2,000 \
\hline 2.0 \% \text { SUTA } & 2,000 \
\hline \text { Other deductions include: } & 500 \
\hline \text { Federal income tax } & 300 \
\hline \text { State income tax } & \$ 20 \
\hline
\end{array}$$ What is the employer's portion of the tax?
A)$1,072.10
B)$56.00
C)$272.10
D)$800.00

Accepted Answer

The employer's portion of the taxes include:
- OASDI: 6.2% of $4,000 = $248
- Medicare: 1.45% of $4,000 = $58
- FUTA: 0.8% of $2,000 = $16
- SUTA: 2.0% of $2,000 = $40
Adding these up: $248 + $58 + $16 + $40 = $362. Therefore, the best choice is C) $272.10, which is the closest option to $362 after subtracting the other deductions from the gross earnings.

Question 3

An employee has gross earnings of $1,000 with withholdings of 6.2% FICA-OASDI,1.45 % FICA-Medicare,$50 for federal income tax and $10 for state income tax.How much is the gross pay?
A)$1000.00
B)$781.15
C)$771.15
D)$791.15

Accepted Answer

The gross pay is the total amount earned before any deductions, which is $1,000.00 in this scenario.

Question 4

An employee earns $16 per hour.He worked 45 hours the last week of January (assuming time and a half for overtime).
Calculate the total amount of employee deductions.
The business is involved in interstate commerce.
Federal Income Tax rate = 20%
State Income Tax rate = 5%
FICA rate OASDI = 6.2% and Medicare = 1.45%
FUTA rate = .8%
SUTA rate = 5.6%
$ ________

Accepted Answer

The answer of An employee earns $16 per hour.He worked...

Question 5

Ocean's Auction House's payroll for April includes the following data: $$\begin{array} { | l | r | } 
\hline \text { Gross earnings } & \$ 2,900 \
\hline \text { Salaries subject to FICA: } & \
\hline 6.2 \% \text { OASDI } & 2,550 \
\hline 1.45 \% \text { Medicare } & 3,000 \
\hline \text { Salaries subject to unemployment: } & \
\hline 0.8 \% \text { FUTA } & 2,000 \
\hline 2.0 \% \text { SUTA } & 2,000 \
\hline \text { Other deductions include: } & 500 \
\hline \text { Federal income tax } & 300 \
\hline \text { State income tax } & \$ 20 \
\hline
\end{array}$$What is the gross pay?
A)$1,998.40
B)$1,942.40
C)$2,900.00
D)$2,798.40

Accepted Answer

The gross pay is given as $2,900 in the first row of the table. Therefore, the answer is $2,900. None of the other information in the table is needed to answer this question.

Question 6

An employee earns $32 per hour.She worked 55 hours the third week of January.
Calculate the gross pay.
The business is involved in interstate commerce.
Federal Income Tax rate = 20%
State Income Tax rate = 5%
FICA rate OASDI = 6.2% and Medicare = 1.45%
FUTA rate = .8%
SUTA rate = 5.6%
$ ________

Accepted Answer

The answer of An employee earns $32 per hour.She worked...

Question 7

Explain what is meant by the cumulative gross earnings.

Accepted Answer

The answer of Explain what is meant by the cumulative...

Question 8

An employee has gross earnings of $1,000 with withholdings of 6.2% FICA-OASDI,1.45% FICA-Medicare,$50 for federal income tax and $10 for state income tax.How much is the net pay?
A)$900.00
B)$781.15
C)$863.50
D)$791.15

Accepted Answer

The answer of An employee has gross earnings of $1,000...

Question 9

Workers' compensation:
A)insures employees against losses they may incur due to injury or death while on the job.
B)is based on the total estimated payroll.
C)is paid for by the employer.
D)All of the above are correct.

Accepted Answer

Workers' compensation insurance is a type of insurance that helps employees who are injured or become sick as a result of their work. It provides wage replacement and medical benefits to employees who are injured in the course of their employment. It is paid for by the employer and is typically based on the total estimated payroll of the company. Therefore, all the given options are correct regarding workers' compensation.

Question 10

An employee earns $32 per hour.
She worked 50 hours the third week of January (assume time and a half for overtime)
Calculate the net pay.
The business is involved in interstate commerce.
Federal Income Tax rate = 20%
State Income Tax rate = 5%
FICA rate OASDI = 6.2% and Medicare = 1.45%
FUTA rate = .8%
SUTA rate = 5.6%
$ ________

Accepted Answer

The answer of An employee earns $32 per hour.
She worked...

Question 11

From the following information,complete the chart for gross earnings for the week.Assume an overtime rate of time and a half over 40 hours.
 $\begin{array}{lccc} 
& \text { Hourly kate } & \begin{array}{c}
\text { No. of Hours } \
\text { Worked }
\end{array} & \text { Gross Earning: } \
\text { Kuit Nelson } & \$ 14 & 41 & - \
\text { Sabrina Schmitz } & \$ 16 & 39 & - \
\text { Kirk Seifker } & \$ 18 & 43 &-
\end{array}$

Accepted Answer

The answer of From the following information,complete the chart for...

Question 12

If the employee has $500 withheld from their check for federal income tax,what is the amount that the employer would need to pay for their portion of the federal income tax?
A)$500
B)$100
C)$0
D)$400

Accepted Answer

The employer does not pay a portion of the federal income tax withheld from the employee's paycheck. The employer is responsible for paying their portion of Social Security and Medicare taxes, but not for federal income tax.

Question 13

Unemployment taxes are:
A)based on wages paid to employees.
B)based employer's payment history.
C)the same for all employers.
D)Both A and B are correct.

Accepted Answer

Unemployment taxes are based on the wages paid to employees and the employer's payment history. Each employer is assigned a tax rate based on their payment history and the amount of unemployment benefits paid out to their former employees. Therefore, both options A and B are correct.

Question 14

Why would a business decide to use an external company to prepare their payroll checks and related reports?

Accepted Answer

The answer of Why would a business decide to use...

Question 15

Ocean's Auction House's payroll for April includes the following data: $$\begin{array} { | l | r | } 
\hline \text { Gross earnings } & \$ 3,000 \
\hline \text { Salaries subject to FICA: } & \
\hline 6.2 \% \text { OASDI } & 2,550 \
\hline 1.45 \% \text { Medicare } & 3,000 \
\hline \text { Salaries subject to unemployment: } & \
\hline 0.8 \% \text { FUTA } & 2,000 \
\hline 2.0 \% \text { SUTA } & 2,000 \
\hline \text { Other deductions include: } & 500 \
\hline \text { Federal income tax } & 300 \
\hline \text { State income tax } & \$ 20 \
\hline
\end{array}$$What is the net pay?
A)$1,998.40
B)$1,942.40
C)$3,000.00
D)$2,798.40

Accepted Answer

Explanation:Net pay = Gross earnings - (FICA taxes + FUTA + SUTA + other deductions + federal income tax + state income tax)= $3,000 - ($186 + $16 + $40 + $500 + $300 + $20)= $3,000 - $1,062= $1,938

Question 16

If the employee has $300 withheld from their check for FICA-OASDI,what is the amount that the employer would need to pay?
A)$300
B)$100
C)$0
D)$400

Accepted Answer

The employer is required to match the FICA-OASDI (Social Security) contribution made by the employee, so if $300 was withheld from the employee's check for FICA-OASDI, the employer would also need to pay $300.

Question 17

The College Credit Card Services has a significant increase in business each spring due to a large increase in new applicants from graduating college students.Subsequently,each spring 40 temporary workers are hired for a 12-week period,working 40 hours per week at $10 per hour and then they are laid off.College's permanent employment total is 350 workers.Because of these yearly layoffs,College's state unemployment merit tax rate is 9%.If the number of layoffs could be reduced,the merit tax rate could be reduced to 4.1%.
As the payroll specialist for College,you have been asked to evaluate the following and determine the pros/cons of each decision:
1.Should College stop hiring temporary employees and ask its full-time workers to work overtime to handle the extra load?
2.Should College get its temporary employees from a temporary employment agency and therefore not be subject to the extra taxes?

Accepted Answer

The answer of The College Credit Card Services has a...

Question 18

The payroll taxes the employer is responsible for are:
A)FICA-OASDI.
B)FICA-Medicare.
C)worker's compensation.
D)All of the above are correct.

Accepted Answer

Employers are responsible for paying payroll taxes for FICA-OASDI, FICA-Medicare, and worker's compensation.

Question 19

What is the purpose of the Fair Labor Standards Act?

Accepted Answer

The answer of What is the purpose of the Fair...

Question 20

List the purposes of Federal Insurance Contributions Act.

Accepted Answer

The answer of List the purposes of Federal Insurance Contributions...

Quiz 7: Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

An employee has gross earnings of $1,000 with withholdings of 6.2% FICA-OASDI,1.45 % FICA-Medicare,$50 for federal income tax and $10 for state income tax.How much is the gross pay?

An employee earns $32 per hour.She worked 55 hours the third week of January. Calculate the gross pay. The business is involved in interstate commerce. Federal Income Tax rate = 20% State Income Tax rate = 5% FICA rate OASDI = 6.2% and Medicare = 1.45% FUTA rate = .8% SUTA rate = 5.6% $ ________

Explain what is meant by the cumulative gross earnings.

An employee has gross earnings of $1,000 with withholdings of 6.2% FICA-OASDI,1.45% FICA-Medicare,$50 for federal income tax and $10 for state income tax.How much is the net pay?

Workers' compensation:

If the employee has $500 withheld from their check for federal income tax,what is the amount that the employer would need to pay for their portion of the federal income tax?

Unemployment taxes are:

Why would a business decide to use an external company to prepare their payroll checks and related reports?

If the employee has $300 withheld from their check for FICA-OASDI,what is the amount that the employer would need to pay?

The payroll taxes the employer is responsible for are:

What is the purpose of the Fair Labor Standards Act?

List the purposes of Federal Insurance Contributions Act.