Beth's earnings during the month of May were $1,200. Her earnings for the year prior to May were $12,800. Beth's employer is subject to state unemployment of 2.0% and federal unemployment taxes of 0.8% on the first $7,000. The employer's unemployment payroll tax expense for May is:

Question

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Beth's total earnings for the year prior to May were $12,800, and her earnings for May were $1,200, making her total earnings $14,000. Since the unemployment taxes are only applicable to the first $7,000 of an employee's earnings, and Beth has already exceeded this limit before May, the employer's unemployment payroll tax expense for May is $0.

Beth's Earnings During the Month of May Were $1,200