Answer:
The quarter has 3 months so all 15 weeks shall have following taxes:
Employee Wages Exempt under FUTA or SUTA
Employee 1
Wages = 15 week x 900 = 13.500
Exempt under FUTA or SUTA = 13,500 - 7,000 = 6.500
Employee 2
Wages = 15 week x 1200 = 18.000
Exempt under FUTA or SUTA = 18.000 - 7,000= 11000
From the above table.
The JM pays employee 1: 900 and employee 2: 1,200. For 15 weeks they were paid,
Employee I is paid, 900 x 15 weeks
= 13,500
Employee 2 is paid, 1200 x 15 weeks
= I 8,000
For employee 1,
= 13,500 - 7,000
Here, SUTA tax is 5.4% on the first 7,000 the employer pays an employee = 6500
For employee 2,
=18,000 - 7000
Here, the SUTA tax is 5.4% on the first 7000 the employer pays an employee =11000
The taxable wages are obtained by deducting.
= (13,500 +18000) - (6,500 +11,000)
= 31500 - 17500
= 14000
The SUTA and FUTA taxes that JM pays at the end of quarter 1 and 2 is, SUTA,
0.057 x 14,000 = $798
FUTA.
0.008 x 14000
= $112
Hence. The SUTA and FUTA taxes paid are $798 and $112 respectively.
