Jerry Little's gross wages as of October 31 were $110,000. He earned gross wages of $4,000 for the pay period ended November 15, 2019. Deducted from his paycheck this period, were federal income taxes of $400, state income taxes of $150, social security of 6.2% on the first $122,700 and Medicare tax of 1.45%. State Unemployment Tax is 4%, and Federal Unemployment tax is 0.6% on the first $7,000 of annual earnings. Calculate the employer payroll income taxes associated with Jerry's November 15 paycheck.

Question

Quizplus · Accepted Answer

For Jerry's November 15 paycheck, the employer is responsible for matching Social Security and Medicare taxes, and potentially paying State Unemployment Tax (SUTA) and Federal Unemployment Tax (FUTA). However, since Jerry's gross wages as of October 31 were $110,000, and he earned an additional $4,000 for the pay period ended November 15, his total earnings for the year would be $114,000. This exceeds the $7,000 threshold for FUTA and the $122,700 cap for Social Security taxes, meaning no FUTA or additional Social Security taxes are due from the employer for this pay period.The employer's payroll taxes for this paycheck would therefore include:- Medicare tax at 1.45% of $4,000 = $58.00 (since there's no wage base limit for Medicare, it applies to all of Jerry's earnings).Since Jerry's earnings have exceeded the caps for Social Security and FUTA, and SUTA is typically not applicable beyond certain thresholds (which vary by state and are not specified here, but Jerry's earnings likely exceed any common threshold), the only additional employer payroll tax calculated from the information provided is the Medicare tax.Therefore, the correct answer is $58.00, which is associated with the Medicare tax that the employer must match.

Jerry Little's Gross Wages as of October 31 Were $110,000