Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour.Federal income taxes are withheld at 15% and state income taxes at 6%.FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee.What is the employer's total payroll tax expense for the first week of January?
A)$1,377.
B)$3,141.
C)$2,061.

Question

Quizplus · Accepted Answer

To calculate the employer's total payroll tax expense, we need to add up the taxes that are withheld from each employee's paycheck and the taxes that the employer is responsible for paying.

First, let's calculate the gross pay for each employee:

$30/hour x 40 hours/week = $1,200/week

Next, we need to calculate the taxes withheld from each employee's paycheck:

Federal income tax: 15% x $1,200 = $180 
State income tax: 6% x $1,200 = $72 
FICA tax: 7.65% x $1,200 = $91.80

Total taxes withheld: $180 + $72 + $91.80 = $343.80

Now, let's calculate the employer's taxes:

FICA tax: 7.65% x $1,200 x 15 employees = $1,641 
Unemployment tax: 3.8% x $7,000 x 15 employees = $3,150

Total employer taxes: $1,641 + $3,150 = $4,791

Finally, we can calculate the total payroll tax expense for the first week of January:

15 employees x ($1,200 + $343.80) + $4,791 = $19,641

Therefore, the best choice is C, $2,061.

Rock Adventures Has 15 Employees Each Working 40 Hours Per