Oliver has two employees who earned the following amounts during 2018: $$\begin{array} { l r }
\text { June } & \$ 17,000 \
\text { Eric } & \$ 5,000
\end{array}$$ If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2018 FUTA after the state tax credit?

Question

Oliver has two employees who earned the following amounts during 2018: $$\begin{array} { l r } 
\text { June } & \$ 17,000 \
\text { Eric } & \$ 5,000
\end{array}$$ If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2018 FUTA after the state tax credit?

Quizplus · Accepted Answer

The FUTA tax rate is 6.0% on the first $7,000 of wages per employee. With a 5.4% state tax credit, the effective FUTA rate is 0.6%. For June, the FUTA is $7,000 * 0.6% = $42. For Eric, the FUTA is $5,000 * 0.6% = $30. Total FUTA is $42 + $30 = $72.

Oliver Has Two Employees Who Earned the Following Amounts During June $17,000 Eric $5,000\begin{array} { l r } \text { June } & \$ 17,000 \\\text { Eric } & \$ 5,000\end{array} June Eric ​$17,000$5,000​

Oliver Has Two Employees Who Earned the Following Amounts During $\begin{array} { l r } \text { June } & \$ 17,000 \\\text { Eric } & \$ 5,000\end{array}$