George has four employees who earned $75,000, $27,000, $2,100, and $6,200 during 2015, respectively. He paid 5.4 percent for state unemployment tax. How much FUTA tax will George owe for the four employees?

Question

Quizplus · Accepted Answer

FUTA tax is 0.6 percent of the first $7,000 of wages paid to each employee. George's four employees earned a total of $75,000 + $27,000 + $2,100 + $6,200 = $110,300. The first $7,000 of wages paid to each employee is subject to FUTA tax, so the total amount of wages subject to FUTA tax is $7,000 x 4 = $28,000. The FUTA tax rate is 0.6 percent, so George's FUTA tax liability is $28,000 x 0.006 = $168.

George Has Four Employees Who Earned $75,000, $27,000, $2,100, and $6,200