Answer:
The yearly payroll will cost the employer $538,250.
Step-by-step explanation:
a) Data and Calculations:
Budgeted payroll = $500,000
Social security tax rate = 6.25%
Medicare tax rate = 1.4%
Social security tax = $31,250 ($500,000 * 6.25%)
Medicare tax amount= $7,000 ($500,000 * 1.4%)
Total taxes amount = $38,250
The total yearly payroll cost should be put at $538,250 ($500,000 + 38,250). This means that as the employees pay taxes amounting to $38,20, the employer will also pay matching taxes amounting to $38,250.
