Question

France Company has an employee who earns a monthly salary of $4,000. Based on the Form W-4, the tax tables require that $150 per month be withheld for income taxes. The FICA - Social Security tax rate is 6.0%; the FICA - Medicare tax rate is 1.5%; the federal unemployment tax rate is 0.6%; the state unemployment tax rate is 5.4%. What is France Company’s payroll tax expense for the month of January?

Answer 1

Answer: $540

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Calculation of payroll tax expense:
Social security tax                     [Gross pay x $6% = 4,000 x 6%]	$240
Medicare tax                             [Gross pay x 1.5% = $4,000 x 1.5%]	$60
Federal unemployment tax         [Gross pay x 0.6% = $4,000 x 0.6%]	$24
State unemployment tax              [Gross pay x 5.4% = $4,000 x 5.4%]	$216
Total payroll tax expense [$240 + $60 + $24 + $216	$540