Rick O\'Shea, the only employee of Hunter Furniture Company, makes $48,000 per y

Question

Rick O'Shea, the only employee of Hunter Furniture Company, makes $48,000 per year and is paid once a month. For the month of January, his federal income taxes withheld are $280, state income taxes withheld are $60, social security is 6.2% on a maximum wages of $106,800, Medicare tax is 1.45%, State Unemployment Tax is 5.4%, and Federal Unemployment tax is 0.6%, both on a maximum wages of $7,000 per employee. What is the employer's payroll tax expense from Rick's paycheck? $240.00 $306.00 $546.00 $248.00

Explanation / Answer

Ans is $546

Paycheck for January = 48000/12 = $4000

Employer payroll tax = (6.2% + 1.45% + 5.4% + 0.06%) of $4,000

13.65% of 4000 = $546

Note since January income is within limit of limits for FUTA / FICA all rate is combined otherwise we have to consider limits.

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