Question

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. Name Dali Trey Kiesha Chee Gross Pay through Aug. 18 $125,400 126,000 7,800 1,750 Current Week Income Tax Gross Pay Withholding $5,600 $ 383 2,400 403 1,600 45 2,000 35 In addition to gross pay, the company must pay one-half of the $74 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 Subject to Tax Tax Rate Tax Amount Tax Rate 6.20% Dali Trey Kiesha Chee Total $ 0.00 2) Employees' FICA Withholdings for Medicare

Answer 1

1) Employees' FICA Withholdings for Social Security:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3000		186	(128400-125400)
Trey	2400		148.8
Kiesha	1600		99.2
Chee	2000		124
		Total	558
2) Employees' FICA Withholdings for Medicare:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	5600		81.2
Trey	2400		34.8
Kiesha	1600		23.2
Chee	2000		29
		Total	168.2
3) Employers' FICA Taxes for Social Security:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3000		186	(128400-125400)
Trey	2400		148.8
Kiesha	1600		99.2
Chee	2000		124
		Total	558
4) Employers' FICA Taxes for Medicare:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	5600		81.2
Trey	2400		34.8
Kiesha	1600		23.2
Chee	2000		29
		Total	168.2
5) Employers' FUTA Taxes:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		0.60%
Dali	0		0
Trey	0		0
Kiesha	0		0
Chee	1750		10.5
		Total	10.5
6) Employers' SUTA Taxes:
Employee	Earnings sub. To Tax	Tax Rate	Tax Amount
Tax rate		5.40%
Dali	0		0
Trey	0		0
Kiesha	0		0
Chee	1750		94.5
		Total	94.5
7) Each Employees' Net (take-home) Pay:
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	5600	2400	1600	2000	11600
Income tax withholding	383	403	45	35	866
FICA-Social security	186	148.8	99.2	124	558
FICA-Medicare	81.2	34.8	23.2	29	168.2
Health Insurance	37	37	37	37	148
Net Pay	4912.8	1776.4	1395.6	1775	9859.8
8) Employer's total payroll-related expense for each employee:
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	5600	2400	1600	2000	11600
FICA-Social security	186	148.8	99.2	124	558
FICA-Medicare	81.2	34.8	23.2	29	168.2
FUTA				10.5	10.5
SUTA				94.5	94.5
Health Insurance	37	37	37	37	148
Pension	448	192	128	160	928
Total Payroll Expense	6352.2	2812.6	1887.4	2455	13507