Question

Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $128,400 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 5.4%. 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.

Name	Gross Pay Through August 18	Gross Pay for Current Week	Income Tax Withholding
Dali	124,800	5,000	469
Trey	126,000	2,400	354
Kiesha	8,400	2,000	50
Chee	2,350	1,400	40

In addition to gross pay, the company must pay one-half of the $86 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.):

Find...

1. Employee's FICA withholdings for social security

2. employee's FICA withholdings for Medicare

3. employer's FICA taxes for social security

4. employer's FICA taxes for medicare

5. employer's FUTA Taxes

6. employer's SUTA taxes

7. each employee's net (take home) pay

8. employers total payroll related expense for each employee

Answer 1

Part 1

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	3600	6.20%	223.20
Trey	2400	6.20%	148.80
Kiesha	2000	6.20%	124.00
Chee	1400	6.20%	86.80
		Total	582.80

128400-124800 = 3600

Part 2

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	5000	1.45%	72.50
Trey	2400	1.45%	34.80
Kiesha	2000	1.45%	29.00
Chee	1400	1.45%	20.30
		Total	156.60

Part 3

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	3600	6.20%	223.20
Trey	2400	6.20%	148.80
Kiesha	2000	6.20%	124.00
Chee	1400	6.20%	86.80
		Total	582.80

Part 4

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	5000	1.45%	72.50
Trey	2400	1.45%	34.80
Kiesha	2000	1.45%	29.00
Chee	1400	1.45%	20.30
		Total	156.60

Part 5

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia		0.60%
Trey		0.60%
Kiesha		0.60%
Chee	1400	0.60%	8.4
		Total	8.4

Part 6

Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia		5.40%
Trey		5.40%
Kiesha		5.40%
Chee	1400	5.40%	75.6
		Total	75.6

Part 7

Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	5000	2400	2000	1400	10800
Income tax withholding	469	354	50	40	913
FICA - Social Security	223.20	148.80	124.00	86.80	582.8
FICA - Medicare	72.5	34.80	29.00	20.3	156.6
Health Insurance	43	43	43	43	172
Net Pay	4192.30	1819.40	1754.00	1209.90	8975.6

Part 8

Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	5000	2400	2000	1400	10800
FICA - Social Security	223.20	148.80	124.00	86.80	582.80
FICA - Medicare	72.5	34.8	29	20.3	156.6
FUTA	0	0	0	8.4	0
SUTA	0	0	0	75.6	75.6
Health Insurance	43	43	43	43	172
Pension	400	192	160.00	112.00	864.00
Total Payroll Expense	5738.70	2818.60	2356.00	1746.10	12651.00