Question

Problem 9-3a paytoll expenses, withholdings and taxes.

Problem 9-3A Payroll expenses, withholdings, and taxes LO P2, P3 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 Dal Trey Kiesha Chee Current Week Gross Pay Income Tax through Aug. 18Gross Pay Withholding Withholding $124,600 $4,500 $ 497 125,800 2.500 33B 8.600 1.000 52 2.550 1.000 In addition to gross pay, the company must pay one-half of the $90 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 Employee Earnings Subject to Tax Tax Rate Dali Trey Kiesha

Answer 1

1) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3800	6.20%	235.60
Trey	2600	6.20%	161.20
Kiesha	1000	6.20%	62.00
Chee	1000	6.20%	62.00
		Total	520.80
2) Employees' FICA Withholdings for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	4500	1.45%	65.25
Trey	2600	1.45%	37.70
Kiesha	1000	1.45%	14.50
Chee	1000	1.45%	14.50
		Total	131.95
3) Employer's FICA Taxes for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3800	6.20%	235.60
Trey	2600	6.20%	161.20
Kiesha	1000	6.20%	62.00
Chee	1000	6.20%	62.00
		Total	520.80
4) Employer's FICA Taxes for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	4500	1.45%	65.25
Trey	2600	1.45%	37.70
Kiesha	1000	1.45%	14.50
Chee	1000	1.45%	14.50
		Total	131.95
5) Employer's FUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		0.60%
Dali		0.60%
Trey		0.60%
Kiesha		0.60%
Chee	1000	0.60%	6.00
		Total	6.00
6) Employer's SUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		5.40%
Dali		5.40%
Trey		5.40%
Kiesha		5.40%
Chee	1000	5.40%	54.00
		Total	54.00
7) Each Employee's Net (take-home) Pay
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	4500.00	2600.00	1000.00	1000.00	9100.00
Income tax withholding	497.00	338.00	52.00	41.00	928.00
FICA - Social Security	235.60	161.20	62.00	62.00	520.80
FICA - Medicare	65.25	37.70	14.50	14.50	131.95
Health Insurance	45.00	45.00	45.00	45.00	180.00
Net Pay	3657.15	2018.10	826.50	837.50	7339.25
8) Total Payroll Related Expense for Each Employee
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	4500.00	2600.00	1000.00	1000.00	9100.00
FICA - Social Security	235.60	161.20	62.00	62.00	520.80
FICA - Medicare	65.25	37.70	14.50	14.50	131.95
FUTA	0.00	0.00	0.00	6.00	6.00
SUTA	0.00	0.00	0.00	54.00	54.00
Health Insurance	45.00	45.00	45.00	45.00	180.00
Pension	360.00	208.00	80.00	80.00	728.00
Total Payroll Expense	5205.85	3051.90	1201.50	1261.50	10720.75