Question

ment Chapter 116 Help Seve & Exit Check Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $128.400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee the company's FUTA taxes are 0.6% and SUTA taxes are 5.4%. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the company's four employees Current Week Income Tax Gross Pay withholding $5,000 $ 355 Gross Pay through Aug. 18 $125,600 125,000 7,600 1.550 Name Dali Trey Kiesha Chee 1,609 2.000 In addition to gross pay, the company must pay one-half of the $70 per employee weekly health insurance, each employee pays the remaining one-half. The company also contributes an extra 8% of each employee's gross pay (at no cost to employees) to a pension fund. Required: Compute the following for the week ended August 25 (Round your intermediate calculations and final answers to 2 decimal places.) 1) Employees' FICA Withholdings for Social Security Employee Earnings Tax Amount Subject to Tex Tax Rate Tax Rate Da

Answer 1

1) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	2800	6.20%	173.60
Trey	3400	6.20%	210.80
Kiesha	1600	6.20%	99.20
Chee	2000	6.20%	124.00
		Total	607.60
2) Employees' FICA Withholdings for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	5000	1.45%	72.50
Trey	3400	1.45%	49.30
Kiesha	1600	1.45%	23.20
Chee	2000	1.45%	29.00
		Total	174.00
3) Employer's FICA Taxes for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	2800	6.20%	173.60
Trey	3400	6.20%	210.80
Kiesha	1600	6.20%	99.20
Chee	2000	6.20%	124.00
		Total	607.60
4) Employer's FICA Taxes for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	5000	1.45%	72.50
Trey	3400	1.45%	49.30
Kiesha	1600	1.45%	23.20
Chee	2000	1.45%	29.00
		Total	174.00
5) Employer's FUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		0.60%
Dali	0	0.60%
Trey	0	0.60%
Kiesha	0	0.60%
Chee	2000	0.60%	12.00
		Total	12.00
6) Employer's SUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		5.40%
Dali	0	5.40%
Trey	0	5.40%
Kiesha	0	5.40%
Chee	2000	5.40%	108.00
		Total	108.00
7) Each Employee's Net (take-home) Pay
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	5000.00	3400.00	1600.00	2000.00	12000.00
Income tax withholding	355.00	64.00	43.00	34.00	496.00
FICA - Social Security	173.60	210.80	99.20	124.00	607.60
FICA - Medicare	72.50	49.30	23.20	29.00	174.00
Health Insurance	35.00	35.00	35.00	35.00	140.00
Net Pay	4363.90	3040.90	1399.60	1778.00	10582.40
8) Total Payroll Related Expense for Each Employee
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	5000.00	3400.00	1600.00	2000.00	12000.00
FICA - Social Security	173.60	210.80	99.20	124.00	607.60
FICA - Medicare	72.50	49.30	23.20	29.00	174.00
FUTA	0.00	0.00	0.00	12.00	12.00
SUTA	0.00	0.00	0.00	108.00	108.00
Health Insurance	35.00	35.00	35.00	35.00	140.00
Pension	400.00	272.00	128.00	160.00	960.00
Total Payroll Expense	5681.10	3967.10	1885.40	2468.00	14001.60