Rick O'Shea,the only employee of Hunter Furniture Company,makes $30,000 per year and is paid once a month.For the month of January,his federal income taxes withheld are $180,state income taxes withheld are $37,social security is 6.2% on a maximum wages of $113,700,Medicare tax is 1.45%,State Unemployment Tax is 4.2%,and Federal Unemployment tax is .6%,both on a maximum wages of $7,000 per employee.What is the employer's payroll tax expense associated with Rick's paycheck?

Question

Quizplus · Accepted Answer

First, we need to calculate Rick's gross pay for the month of January:
$30,000 / 12 = $2,500 gross pay for the month

Next, we need to calculate the social security tax withheld:
6.2% * $2,500 = $155

We also need to calculate the Medicare tax withheld:
1.45% * $2,500 = $36.25

Now we can calculate the employer's payroll tax expense associated with Rick's paycheck:

Social Security tax expense: 
6.2% * $7,000 = $434.00 (maximum for each employee)
$155.00 (amount withheld from Rick's paycheck) 
Total expense = $434.00

Medicare tax expense: 
1.45% * $2,500 = $36.25 (maximum for each employee) 
$36.25 (amount withheld from Rick's paycheck) 
Total expense = $36.25

State Unemployment Tax (SUTA) expense: 
4.2% * $7,000 = $294.00 (maximum for each employee) 
Total expense = $294.00

Federal Unemployment Tax (FUTA) expense: 
0.6% * $7,000 = $42.00 (maximum for each employee) 
Total expense = $42.00

Adding up all of the employer's payroll tax expenses, we get:

$434.00 (Social Security) + $36.25 (Medicare) + $294.00 (SUTA) + $42.00 (FUTA) = $806.25

Therefore, the employer's payroll tax expense associated with Rick's paycheck is $311.25 (federal income tax) + $37.00 (state income tax) + $806.25 (payroll taxes) = $1,154.50.

The closest option is C: $311.25.

Rick O'Shea,the Only Employee of Hunter Furniture Company,makes $30,000 Per