-Assume that social security taxes are payable at a 6% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 6.2% on the first $7,000 of earnings. If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800, what is the total employer payroll taxes related to the current week?
A) $187.50
B) $199.90
C) $342.50
D) $12.40

Question

-Assume that social security taxes are payable at a 6% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 6.2% on the first $7,000 of earnings. If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800, what is the total employer payroll taxes related to the current week?
A) $187.50 
B) $199.90 
C) $342.50 
D) $12.40

Quizplus · Accepted Answer

Employer's payroll tax expense = Social security tax + Medicare tax + Federal and state unemployment tax = ($2,500 × 6%) + ($2,500 × 1.50%) + [($7,000 - $6,800) × 6.2%] = $150 + $37.50 + $12.40 = $199.90

-Assume That Social Security Taxes Are Payable at a 6