Question

Exercise 9-5 Computing payroll taxes LO P2, P3 BMX Company has one employee. FICA Social Security taxes are 6.20% of the first $117,000 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.60% and SUTA taxes are 2.90% of the first $7,000 paid to its employee. cao Gross Pay through August $ 5,900 17,700 104,000 Gross Pay for September $ 1,700 3,500 20,500 Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.) a) September Earnings Subject to Tax Tax Rate Tax Amount Tax FICA—Social Security FICA—Medicare FUTA SUTA b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA—Medicare FUTA SUTA Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA—Medicare FUTA SUTAI

Answer 1

a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	1700	6.20%	105.40
FICA-Medicare	1700	1.45%	24.65
FUTA	1100	0.60%	6.60
SUTA	1100	2.90%	31.90
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	3500	6.20%	217.00
FICA-Medicare	3500	1.45%	50.75
FUTA	0	0.60%	0.00
SUTA	0	2.90%	0.00
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	13000	6.20%	806.00
FICA-Medicare	20500	1.45%	297.25
FUTA	0	0.60%	0.00
SUTA	0	2.90%	0.00
Note: Earnings taxable for FUTA and SUTA in (a) = 7000-5900 = $1100
Note: Earnings taxable for Social Security in (c) = 117000-104000 = $13000