20 employees who make 14 per hour. They all worked 50 hours last payroll period. Calculate...

20 employees who make 14 per hour. They all worked 50 hours last payroll period.

Calculate the payroll tax liability for its employees for the period. Show your work and explain your answer.

Assume the following rates:

FICA: 6.20%

MED:1.45%

WHT 10%

Expert Solution

The payroll tax liability is comprised of the social security tax, Medicare tax, and various income tax withholdings. The liability contains taxes that are paid by employees and taxes that are paid by the employer. The employer withholds those taxes that are paid by employees, and remits them to the applicable government authorities, along with the taxes that are paid by the company. Thus, the employer acts as an agent for the government, in that it collects payroll taxes from employees and remits them to the government. The payroll tax liability is comprised of both groups of taxes, since the employer is responsible for remitting all of them to the government. The employee is not responsible for remitting any taxes directly associated with a paycheck.

Calculations

Gross Payroll = 20 employees * 14 per hour * 50 hours = 14000

Gross Payroll = 14000

FICA(6.20%) = 868

MED(1.45%) = 203

WHT(10%) = 1400

Payroll tax liabilty = FICA+MED+WHT

Total Payroll Tax Liability = 868+203+1400 = 2471

Net paycheck = Gross pay check - deductions = 14000-2471= 11529

ekkarill92 answered 2 years ago

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