The total payroll of Carbon Company for the month of October was $240,000, all subject to CPP deductions of 4.95% and EI deductions of 1.83%.As well, $60,000 in federal income taxes and $6,000 of union dues were withheld.The employer matches the employee deductions and contributes 1.4 times the employee EI deductions.What amount should Carbon record as employer payroll tax expense for October?
A)$16,272.00
B)$18,028.80
C)$24,028.80
D)$78,028.80

Question

Quizplus · Accepted Answer

First, we need to calculate the CPP and EI deductions from the total payroll:

- CPP: 4.95% of $240,000 = $11,880
- EI: 1.83% of $240,000 = $4,392

Then, we can calculate the employer contributions:

- CPP: $11,880
- EI: 1.4 x $4,392 = $6,148.80

Now we can calculate the total payroll tax expense for the employer:

- Total CPP and EI contributions: $11,880 + $6,148.80 = $18,028.80
- Plus federal income taxes withheld: $60,000
- Plus union dues withheld: $6,000

So the total employer payroll tax expense for October is: $18,028.80 + $60,000 + $6,000 = $84,028.80

However, the question asks only for the employer's payroll tax expense, so we only consider the CPP and EI contributions, which total to $18,028.80. Therefore, the best choice is B.

The Total Payroll of Carbon Company for the Month of October