An employee earned $4,600 in February working for an employer.Cumulative earnings of the previous pay periods are $4,800.The FICA tax rate for Social Security is 6.2% of the first $118,500 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current 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.What is the amount the employer should record as payroll taxes expense for the month of February?

Question

Quizplus · Accepted Answer

Employer Taxes = FICA Social Security + FICA Medicare + FUTA + SUTA
Employer Taxes = $285.20* + $66.70** + $13.20*** + $118.80*** = $483.90
*FICA-SS Tax $4,600 × 0.062 = $285.20
**FICA-Medicare Tax $4,600 × 0.0145 = $66.70
***Wages taxable for Unemployment = $7,000 ? $4,800 = $2,200
FUTA = $2,200 × 0.006 = $13.20; SUTA = $2,200 × .054 = $118.80

An Employee Earned $4,600 in February Working for an Employer