Steve has cumulative earnings of $7,250 and earned $700 during the current payroll period. If the state unemployment taxes (SUTA) tax is 5.4 percent, with a ceiling of $7,000, the employer liability for state unemployment taxes is:

Question

Quizplus · Accepted Answer

Since Steve's cumulative earnings before the current payroll period were $7,250, he had already exceeded the SUTA ceiling of $7,000. Therefore, only the earnings up to $7,000 are subject to the SUTA tax. Since he was already over the ceiling, no additional SUTA tax is due on the $700 earned in the current period. However, the question seems to imply calculating the SUTA on the amount that exceeded the ceiling before the current payroll, which is not how SUTA works. Given the options and the common understanding of SUTA calculations, none directly apply to the correct handling of SUTA for earnings above the ceiling. The correct approach would be $0 due to the ceiling being exceeded, but given the options and assuming a mistake in the premise, calculating 5.4% of $700 gives $37.80, which is not an option. Thus, the response seems to be based on a misunderstanding of the question's premise or a calculation error. The correct SUTA liability based on the provided options and assuming any calculation should be from earnings within the taxable limit would be $0, but this is not an option provided. Therefore, the response provided as "B) $13.50" is incorrect based on standard SUTA calculations, and there seems to be a misunderstanding or misinterpretation in the question setup or answer options.

Steve Has Cumulative Earnings of $7,250 and Earned $700 During