Sky Co. employed Tom Mills in 2016. Tom earned $5,000 per month and worked the entire...

Sky Co. employed Tom Mills in 2016. Tom earned $5,000 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings and the Medicare tax rate is 1.5 percent. Tom’s federal income tax withholding amount is $890 per month. Use 5.4 percent for the state unemployment tax rate and .6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee.

Required:

a.	Answer the following questions. (Round your answers to 2 decimal places.)

1.	What is Tom’s net pay per month?
2.	What amount does Tom pay monthly in FICA payroll taxes?

3.	What is the total payroll tax expense for Sky Co. for January 2016? February 2016? March 2016? December 2016?

	Total Employer Payroll Tax
January
February
March
December

b.	Assume that instead of $5,000 per month Tom earned $9,600 per month. Answer the following questions. (Round your answers to 2 decimal places.)

What is Tom’s net pay?

	Net Pay
January to November (per month)
December

2.	What amount does Tom pay monthly in FICA payroll taxes?

	FICA Payroll Tax
January to November (per month)
December

3.	What is the total payroll tax expense for Sky Co. for January 2016? February 2016? March 2016? December 2016?

	Total Employer Payroll Tax
January
February
March
December

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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