Question

The payroll register of Charbroil Company indicates $1,200 of social security tax withheld and $300 of Medicare tax withheld on total salaries of $20,000 for the period. Assume earnings subject to state and federal unemployment compensation taxes are $7,000, at the federal rate of 0.8% and the state rate of 5.4%. What is the total amount of payroll tax expense?

Answer 1

Answer: $ 1934

Explanation:

Total amount of payroll tax expense =

Social security tax withheld+Medicare tax withheld +State and federal unemployment compensation taxes on earnings

=1200+300+( 0.8 + 5.4 )/100 × 7000

= 1500 + ( 6.2 )/100 × 7000

= 1500 + 0.062 × 7000

= 1500 + 434

= $ 1934