Question

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,338. FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,383.47. What is the amount of the employer's payroll taxes expenses for this employee

Answer 1

Answer:

$1,057.86

Explanation:

Payroll taxes include:

• Social security tax withholdings 6.2% (on the first $132,900 of wages paid) = 6.2% x $8,338 = $516.96
• Medicare tax withholding 1.45% = 1.45% x $8,338 = $120.90
• Federal unemployment taxes (FUTA)  0.6%  = $7,000 x 0.6% = $42
• State unemployment taxes (SUTA) 5.4% = $7,000 x 5.4% = $378

total payroll taxes = $1,057.86