Question

The payroll register of Sara Company indicates $5,800 of social security withheld and $1,450 of Medicare tax withheld on total salaries of $90,000 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $31,500 at the federal rate of 0.8% and the state rate of 5.4%, respectively. What is the total amount of payroll tax expense

Answer 1

Answer: $9,203

Explanation:

Witheld tax amount by company:

Social security = $5,800

Medicare tax = $1,450

Total Earning subject to unemployment compensation tax = $31,500

Federal Unemployment tax rate = 0.8%

State Unemployment tax rate = 5.4%

Federal Unemployment tax amount = 0.008 × $31,500 = $252

State Unemployment tax amount = 0.054 × $31,500 = $1,701

Total payroll tax expense :

(social security + Medicare tax + federal unemployment tax + state unemployment tax)

$(5,800 + 1,450 + 252 +1701)

= $9,203.