Question

Mester Company has 10 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. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Cumulative pay for the current year for each of its employees follows.
Employee Cumulative Pay Employee Cumulative Pay Employee Cumulative Pay
Ken S $6,000 Ann T $146,500 Lori K $119,500
Tim V 60,200 Kathleen K 106,900 Kitty O 36,900
Steve S 87,000 Michelle H 117,000 John W 4,000

A) Compute the amounts in this table for each employee:
(1) FICA Social Security (2) FICA Medicare (3) FUTA taxes (4) SUTA taxes.
B) For the company, compute each total for FICA Social Security taxes, FICA Medicare taxes, FUTA taxes, and SUTA taxes.
(1) tax paid by the employee (2) tax paid by the employer.

Answer 1

Answer:

$\left[\begin{array}{CCCccc}&accumulated&OASDI&HI&SUTA&FUTA\\KEN&6000&360&90&324&36\\ANN&146500&7020&1755&378&42\\LORI&119500&7020&1755&378&42\\TIM&60200&3612&903&378&42\\KATHLEEN&106900&6414&1603.5&378&42\\KITTY&36900&2214&553.5&378&42\\STEVE&89000&5340&1335&378&42\\MICHELLE&117000&7020&1755&378&42\\JHON&4000&240&60&216&24\\\end{array}\right]$

                  HI        OASDI SUTA FUTA TOTAL

Employer 9810 39240 3186 354         52590

Employee 9810 39240                   49050

TOTAL        19620 78480 3186 354         101640

Explanation:

We will compare the accumulated wages with the celling of each tax and apply the tax-rate oto the lower amount.

Then FUTA and SUTA will only be paid by the employeer.

Also, the employeer contributes the same amount for Hi and OASDI as the employees