Question

Aspen Ski Resorts has 150 employees, each working 40 hours per week and earning $11 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee.
Required:
1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January.

Answer 1

Answer:

Salary (Gross) = $66,000 per week ($440 per employee/week)

Total Tax = $22,341

Actual Direct Deposit for Payroll for first week of January = $66,000 - $22,341

= $43,659

Explanation:

No of employees = 150

Number of hours per week = 40hrs

earning per hour = $11

Total Salary earning for all employees = 150 * 40 * 11 = $66,000

Federal Income Tax = 15%

$66,000 * 0.15 = $9,900

State income tax = 5%

$66,000 * 0.05 = $3,300

FICA tax = 7.65%

$66,000 * 0.0765 = $5,049

Unemployment tax = 6.2%

$66,000 * 0.062 = $4092

Total Taxes = $(9900+3300+5049+4092)

= $22,341