BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $
ID: 2511384 • Letter: B
Question
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
Exercise 9-5 Computing payroll taxes LO P2, P3
Compute BMX’s amounts for each of these four taxes as applied to the employee’s gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)
Gross Pay through August Gross Pay for September a. $ 6,600 $ 500 b. 18,400 2,300 c. 112,400 8,200Explanation / Answer
Answer a. Taxes to be Withheld From Gross Pay (Employee Paid Taxes) September Earnings Subject to Tax Tax Rate Tax Amount FICA Social Security Tax 500.00 6.20% 31.00 FICA Medicare 500.00 1.45% 7.25 FUTA 400.00 0.60% 2.40 SUTA 400.00 2.90% 11.60 Answer b. Taxes to be Withheld From Gross Pay (Employee Paid Taxes) September Earnings Subject to Tax Tax Rate Tax Amount FICA Social Security Tax 2,300.00 6.20% 142.60 FICA Medicare 2,300.00 1.45% 33.35 FUTA - 0.60% - SUTA - 2.90% - Answer c. Taxes to be Withheld From Gross Pay (Employee Paid Taxes) September Earnings Subject to Tax Tax Rate Tax Amount FICA Social Security Tax 6,100.00 6.20% 378.20 FICA Medicare 8,200.00 1.45% 118.90 FUTA - 0.60% - SUTA - 2.90% -
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