Triston Vale is paid on a monthly basis. For the month of January of the current year, he earned a total of $5,210. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $885.70. What is the amount of the employer's payroll taxes expenses for this employee?
A)$1,284.27
B)$312.60
C)$398.57
D)$711.17
E)$1,596.87

Question

Quizplus · Accepted Answer

To calculate the employer's payroll tax expenses, we need to first calculate the amounts of each tax:
- FICA tax for Social Security: 6.2% of the first $118,500 of earnings = 6.2% * $5,210 = $322.82
- FICA tax for Medicare: 1.45% of all earnings = 1.45% * $5,210 = $75.60
- FUTA tax: 0.6% of the first $7,000 of earnings = 0.6% * $7,000 = $42
- SUTA tax: 5.4% of the first $7,000 of earnings = 5.4% * $7,000 = $378

So the total employer's payroll tax expenses are:
$322.82 + $75.60 + $42 + $378 = $818.42

Note that the amount of Federal Income Tax withheld from the employee's earnings is not relevant to the employer's payroll tax expenses, as it is simply an amount that the employer withholds from the employee's pay and remits to the government on behalf of the employee.

Triston Vale Is Paid on a Monthly Basis