Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first
ID: 2582076 • Letter: P
Question
Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company’s FUTA taxes are 0.6% and SUTA taxes are 2.15%. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the company’s four employees.
In addition to gross pay, the company must pay one-half of the $92 per employee weekly health insurance; each employee pays the remaining one-half. The company also contributes an extra 8% of each employee’s gross pay (at no cost to employees) to a pension fund.
Required:
Compute the following for the week ended August 25. (Round your intermediate calculations and final answers to 2 decimal places.):
Current Week Name Gross Paythrough Aug. 18 Gross Pay Income Tax Withholding Dali $ 115,800 $ 3,600 $ 511 Trey 116,450 2,050 330 Kiesha 8,700 610 53 Chee 2,650 560 42
Explanation / Answer
Answer 1. Employees' FICA Withholdings for Social Security Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia 2,700.00 6.20% 167.40 ($118,500 - $115,800) Trey 2,050.00 6.20% 127.10 ($118,500 - $116,450) Kiesha 610.00 6.20% 37.82 Chee 560.00 6.20% 34.72 Total 367.04 Answer 2. Employees' FICA Withholdings for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia 3,600.00 1.45% 52.20 Trey 2,050.00 1.45% 29.73 Kiesha 610.00 1.45% 8.85 Chee 560.00 1.45% 8.12 Total 98.89 Answer 3. Employers' FICA Taxes for Social Security Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia 2,700.00 6.20% 167.40 ($118,500 - $115,800) Trey 2,050.00 6.20% 127.10 ($118,500 - $116,450) Kiesha 610.00 6.20% 37.82 Chee 560.00 6.20% 34.72 Total 367.04 Answer 4. Employers' FICA Taxes for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia 3,600.00 1.45% 52.20 Trey 2,050.00 1.45% 29.73 Kiesha 610.00 1.45% 8.85 Chee 560.00 1.45% 8.12 Total 98.89 Answer 5. Employers' FUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia - 0.60% - Trey - 0.60% - Kiesha - 0.60% - Chee 560.00 0.60% 3.36 Total 3.36 Answer 6. Employers' SUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia - 2.15% - Trey - 2.15% - Kiesha - 2.15% - Chee 580.00 2.15% 12.47 Total 12.47 Answer 7. Employee Dahlia Trey Kiesha Chee Total Gross Pay 3,600.00 2,050.00 610.00 560.00 6,820.00 Income Tax Withholding 511.00 330.00 53.00 42.00 936.00 FICA - Social Security 167.40 127.10 37.82 34.72 367.04 FICA - Medicare 52.20 29.73 8.85 8.12 98.89 Health Insurance 46.00 46.00 46.00 46.00 184.00 Net Pay 2,823.40 1,517.18 464.34 429.16 5,234.07 Answer 8. Employee Dahlia Trey Kiesha Chee Total Gross Pay 3,600.00 2,050.00 610.00 560.00 6,820.00 FICA - Social Security 167.40 127.10 37.82 34.72 367.04 FICA - Medicare 52.20 29.73 8.85 8.12 98.89 FUTA - - - 3.36 3.36 SUTA - - - 12.47 12.47 Health Insurance 46 46 46 46 184.00 Pension - 8% 288.00 164.00 48.80 44.80 48.00 Total Payroll Exenses 553.60 366.83 141.47 149.47 713.76
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