Question

Rick O'Shea, the only employee of Hunter Furniture Company, makes $30,000 per year and is paid once a month. For the month of January, his federal income taxes withheld are $180, state income taxes withheld are $37. social security is 6.2% on a maximum wages of $106,800, Medicare tax is 1.45%, State Unemployment Tax is 4.2%, and Federal Unemployment tax is.8%, both on a maximum wages of $7,000 per employee. What is the employer's payroll tax expense from Rick's paycheck? Multiple Choice O $316.25 O O $12500 O $19125 O O $155.00 O

Answer 1

Employer Payroll tax expenses are additional expenses over and above the expense of an employee's gross pay.
The employer portion of payroll taxes includes the following: Social Security taxes, Medicare taxes, Federal
unemployment taxes (FUTA) and State unemployment taxes (SUTA).
In the given Problem, the totla of above taxes can be calculated as follows:
Salary for the month of January    =	$2,500	(30000/12)
Social Security tax @ 6.2%	$155	($2,500*6.2%)
Medicare taxes @ 1.45%	$36.25	($2,500*1.45%)
State Unemployment taxes @ 4.2%	$105	($2,500*4.2%)
Federal Unemployment taxes @ 0.8%	$20	($2,500*.8%)
Total employer's payroll tax expense	$316.25	Answer