Question

Single Taxpayer:	Employee		Employer
Gross Wages	250,000
Federal income tax (W-4)
State income tax (M-4)
Social Security tax
Medicare tax
Additional medicare tax
Other EE deductions				Health insurance for example (50% EE/50% ER)
Net pay				FUTA @ .6%
				SUTA @ 5.4%
				Total payroll tax expense

It is very important for all individuals and especially, accounting professionals/CPAs to understand how payroll works.  

Use the attached Excel file to complete these payroll tax calculations - proper Excel utilization is required.  

Assume the following:

1. Based on the employee's W-4 information, Federal income tax withholdings are 20%.

2. Based on the employee's M-4 information, State income tax withholdings are 5%.

3. The employee's annual health care premiums are $4,800 of which the employer pays half.  

Answer 1

Single Taxpayer:	Employee		Employer
Gross Wages	250,000
Federal income tax (W-4)	58523.50
State income tax (M-4)	15288.80
Social Security tax	8239.80
Medicare tax	3625
Additional medicare tax	450
Other EE deductions	NA			Health insurance for example (50% EE/50% ER)
Net pay	163872.90			FUTA @ .6%
				SUTA @ 5.4%
				Total payroll tax expense

N:B: Newyork City State Tax rate is Applicable.