Triston Vale is paid on a monthly basis.For the month of January of the current year,he earned a total of $5,210.FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The FUTA tax rate is 0.6% and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of Federal Income Tax withheld from his earnings was $885.70.What is the amount of the employer's payroll taxes expenses for this employee?
A)$1,284.27
B)$312.60
C)$398.57
D)$711.17
E)$1,596.87

Question

Quizplus · Accepted Answer

The employer's payroll taxes expenses include the employer's portion of FICA taxes (Social Security and Medicare), FUTA, and SUTA. Since FICA taxes for Social Security (6.2%) and Medicare (1.45%) are matched by the employer, we calculate these on the total earnings of $5,210. FUTA (0.6%) and SUTA (5.4%) are only applied to the first $7,000 of an employee's pay annually, so they are also calculated on the total earnings for January, as it's assumed this is the first month of the year and the $7,000 limit has not been reached.- Employer's portion of Social Security tax = 6.2% of $5,210 = $322.82- Employer's portion of Medicare tax = 1.45% of $5,210 = $75.55- FUTA tax = 0.6% of $5,210 = $31.26- SUTA tax = 5.4% of $5,210 = $281.34Total employer's payroll taxes = $322.82 + $75.55 + $31.26 + $281.34 = $710.97Rounding to the nearest cent might lead to a slight difference, making the closest answer D) $711.17.

Triston Vale Is Paid on a Monthly Basis