Clare's earnings during the month of February were $6,200.Her earnings for the year prior to February were $5,600.Clare's employer is subject to federal unemployment taxes of 0.8% and state unemployment taxes of 5.4% on the first $7,000.The employer's unemployment payroll tax expense for Clare in the month of February is:

Question

Quizplus · Accepted Answer

Clare's earnings for the month of February were $6,200, which is less than the maximum taxable wage base of $7,000. Therefore, the employer's federal unemployment taxes for Clare in February will be 0.8% of $6,200, which is $49.60. The state unemployment taxes will also be 5.4% of $6,200, which is $334.80. However, since the maximum taxable wage base is $7,000, the state unemployment taxes are only applied to the first $7,000 of Clare's earnings, which means the employer's state unemployment taxes for Clare in February will be 5.4% of $7,000, which is $378. Therefore, the total unemployment payroll tax expense for Clare in February will be $49.60 + $378 = $427.60.

Clare's Earnings During the Month of February Were $6,200