In 2011,Wilhelm Company had five employees.Four of the employees worked full-time and earned salaries of $20,000,$25,000,$30,000,and $35,000 respectively.The fifth employee worked only part-time during the first 6 months of the year and earned $3,000.The employer timely paid state unemployment tax equal to 5.4 percent of employee wages.How much federal unemployment tax was paid by Wilhelm Company for 2011?

Question

Quizplus · Accepted Answer

Federal unemployment tax (FUTA) is calculated on the first $7,000 of each employee's wages. The rate is 6.0%, but if the state unemployment tax is paid on time, the rate is reduced by 5.4%, making it 0.6%. For four full-time employees, the tax is 0.6% of $7,000 each, totaling $168 per employee. The part-time employee earned $3,000, so the tax is 0.6% of $3,000, which is $18. Total FUTA tax is $168 * 4 + $18 = $248.

In 2011,Wilhelm Company Had Five Employees