Tanner's gross pay for the week is $980.His yearly pay is under the limit for OASDI.Assume that the rate for state and federal unemployment compensation taxes is 6.2%,and that Tanner's pay year-to-date has not yet exceeded the $7,000 cap.His yearly pay is under the limit for OASDI.What is the total amount of payroll taxes that his employer must record as payroll tax expenses? (Do not round your intermediate calculations.Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of FICA-OASDI tax and FICA-Medicare tax.

FICA-OASDI tax = Gross pay * 6.2% = 980 * 0.062 = $60.76 
FICA-Medicare tax = Gross pay * 1.45% = 980 * 0.0145 = $14.21

Therefore, the total amount of payroll taxes that Tanner's employer must record as payroll tax expenses is:

Total payroll tax expenses = FICA-OASDI tax + FICA-Medicare tax = $60.76 + $14.21 = $74.97

However, since Tanner's pay year-to-date has not yet exceeded the $7,000 cap for the FICA-OASDI tax, the total amount of payroll taxes that his employer must record as payroll tax expenses is:

Total payroll tax expenses = FICA-OASDI tax + FICA-Medicare tax = $55.37 + $14.21 = $69.58

Therefore, the best choice is C.

Tanner's Gross Pay for the Week Is $980