Question

Rock Adventures has 15 employees each working 40 hours per week and earning $30 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the employer's total payroll tax expense for the first week of January?
A) $5,157.
B) $12,843.
C) $13,923.
D) $18,000.

Answer 1

Answer:

B) $12,843

Explanation:

We can use the following method solve the given problem

We can calculate gross wages as follows:

= Number of employees * hours worked per week * hourly rate

= 15 × 40 × $30

= $18,000

We can calculate direct deposit of payroll as follows:

= Gross wages - Total taxes withheld

=$18,000 - $5,157

= $12,843

We can calculate total taxes withheld as:

=$2,700 + $1,080 + $1,377

= $5,157

We can calculate federal income taxes as:

=$18,000 × .15

= $2,700