Question

An employee earns $5,550 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $127,200 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $184 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $152 and contributes $76 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January

Answer 1

Answer:

The amount the employer should record as payroll taxes expense for the employee for the month of January is $695.75

Explanation:

According to the given, The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%.

The remainder are taken out of the employees' checks as part of their responsibility.

Therefore, to calculate the amount the employer should record as payroll taxes expense for the employee for the month of January we would have to make the following calculation:

Total payroll expense=($5,500 x 0.062) + ($5,500 x 0.0145) +($5,500 x 0.006) +($5,500 x 0.044)

Total payroll expense=$695.75

The amount the employer should record as payroll taxes expense for the employee for the month of January is $695.75