Question

Problem 9-3A Payroll expenses, withholdings, and taxes LO P2, P3 Paloma Co. Stars has four employees. FICA Social Security taxes are 6.2% of the first $117,000 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 .6% and SUTA taxes are 6.20%. 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. Current Week Income Tax Withholding $362 129 49 38 Gross Pay through Aug. 18 $115,550 116,200 8,200 2,150 Gross Pay $2,550 800 560 510 Name Dahlia Trey Kiesha Chee In addition to gross pay, the company must pay one-half of the $82 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 cal culations and final answers to 2 decimal places.): 1) Employees' FICA Withholdings for Social Security Earnings Subject to Tax Tax Rate Tax Amount Employee Dahlia Trey Kiesha Chee Total 2) Employees' FICA Withholdings for Medicare Earnings Subject to Tax Employee Tax Rate Tax Amount Dahlia Trey Kiesha Chee Total

Answer 1

1) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	1450	6.20%	89.90
Trey	800	6.20%	49.60
Kiesha	560	6.20%	34.72
Chee	510	6.20%	31.62
		Total	205.84
2) Employees' FICA Withholdings for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	2550	1.45%	36.98
Trey	800	1.45%	11.60
Kiesha	560	1.45%	8.12
Chee	510	1.45%	7.40
		Total	64.1
3) Employer's FICA Taxes for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	1450	6.20%	89.90
Trey	800	6.20%	49.60
Kiesha	560	6.20%	34.72
Chee	510	6.20%	31.62
		Total	205.84
4) Employer's FICA Taxes for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	2550	1.45%	36.98
Trey	800	1.45%	11.60
Kiesha	560	1.45%	8.12
Chee	510	1.45%	7.40
		Total	64.1
5) Employer's FUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	0	0.60%
Trey	0	0.60%
Kiesha	0	0.60%
Chee	510	0.60%	3.06
		Total	3.06
6) Employer's SUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	0	6.20%
Trey	0	6.20%
Kiesha	0	6.20%
Chee	510	6.20%	31.62
		Total	31.62
7) Each Employee's Net (take-home) Pay
Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	2550.00	800.00	560.00	510.00	4420.00
Income tax withholding	362.00	129.00	49.00	38.00	578.00
FICA - Social Security	89.90	49.60	34.72	31.62	205.84
FICA - Medicare	36.98	11.60	8.12	7.40	64.10
Health Insurance	41.00	41.00	41.00	41.00	164.00
Net Pay	2020.12	568.80	427.16	391.98	3408.06
8) Total Payroll Related Expense for Each Employee
Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	2550.00	800.00	560.00	510.00	4420.00
FICA - Social Security	89.90	49.60	34.72	31.62	205.84
FICA - Medicare	36.98	11.60	8.12	7.40	64.10
FUTA	0.00	0.00	0.00	3.06	3.06
SUTA	0.00	0.00	0.00	31.62	31.62
Health Insurance	41.00	41.00	41.00	41.00	164.00
Pension	204.00	64.00	44.80	40.80	353.60
Total Payroll Expense	2921.88	966.20	688.64	665.50	5242.22