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.

						Current Week
Name	Gross Pay through Aug. 18					Gross Pay					Income Tax Withholding
Dali		$	117,800				$	2,400				$	341
Trey			118,000					500					81
Kiesha			7,500					490					42
Chee			1,450					440					33

In addition to gross pay, the company must pay one-half of the $68 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.):

) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dali	not attempted	6.20%selected answer correct	not attempted
Trey	not attempted
Kiesha	not attempted
Chee	not attempted
		Total	$0.00 ) Employees' FICA Withholdings for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dali not attempted not attempted not attempted Trey not attempted Kiesha not attempted Chee not attempted Total $0.00 Employer's FICA Taxes for Social Security Employee Earnings Subject to Tax Tax Rate Tax Amount Dali not attempted not attempted not attempted Trey not attempted Kiesha not attempted Chee not attempted Total $0.00 4) Employer's FICA Taxes for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dali not attempted not attempted not attempted Trey not attempted Kiesha not attempted Chee not attempted Total $0.00 5) Employer's FUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dali not attempted not attempted Trey not attempted Kiesha not attempted Chee not attempted Total $0.00 6) Employer's SUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dali not attempted not attempted Trey not attempted Kiesha not attempted Chee not attempted Total $0.00 7) Each Employee's Net (take-home) Pay Employee Dali Trey Kiesha Chee Total Gross Pay $2,400.00 $500.00 $490.00 $440.00 $3,830.00 Income tax withholding 341.00 81.00 42.00 33.00 497.00 FICA - Social Security 0.00 FICA - Medicare 0.00 Health Insurance not attempted not attempted not attempted not attempted 0.00 Net Pay not attempted not attempted not attempted not attempted $0.00 nnot attemptednot attemptednot attempte

33

8) Total Payroll Related Expense for Each EmployeeEmployeeDaliTreyKieshaCheeTotalGross Pay$2,400.00$500.00$490.00$440.00$3,830.00FICA - Social Security0.000.000.000.000.00FICA - Medicare0.000.000.000.000.00FUTA0.000.000.000.000.00SUTA0.000.000.000.000.00Health Insurancenot attemptednot attemptednot attemptednot attempted0.00Pensionnot attemptednot attemptednot attemptednot attempted0.00Total Payroll Expense$2,400.00$500.00$490.00$440.00$3,830.00

Answer 1

1) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	$700.00	6.20%	43.40
Trey	500.00	6.20%	31.00
Kiesha	490.00	6.20%	30.38
Chee	440.00	6.20%	27.28
		Total	$      132.06
2) Employees' FICA Withholdings for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	$2,400.00	1.45%	34.80
Trey	500.00	1.45%	7.25
Kiesha	490.00	1.45%	7.11
Chee	440.00	1.45%	6.38
		Total	$        55.54
3) Employer's FICA Taxes for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	$700.00	6.20%	43.40
Trey	500.00	6.20%	31.00
Kiesha	490.00	6.20%	30.38
Chee	440.00	6.20%	27.28
		Total	$      132.06
4) Employer's FICA Taxes for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia	$2,400.00	1.45%	34.80
Trey	500.00	1.45%	7.25
Kiesha	490.00	1.45%	7.11
Chee	440.00	1.45%	6.38
		Total	$        55.54
5) Employer's FUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia		0.60%
Trey		0.60%
Kiesha		0.60%
Chee	440	0.60%	2.64
		Total	$          2.64
6) Employer's SUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Dahlia		2.15%
Trey		2.15%
Kiesha		2.15%
Chee	440	2.15%	9.46
		Total	$          9.46
7) Each Employee's Net (take-home) Pay
Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	$                       2,400.00	$ 500.00	$      490.00	$ 440.00	$3,830.00
Income tax withholding	341.00	81.00	42.00	33.00	497.00
FICA - Social Security	43.40	31.00	30.38	27.28	132.06
FICA - Medicare	34.80	7.25	7.11	6.38	55.54
Health Insurance	34.00	34.00	34.00	34.00	136.00
Net Pay	$1,946.80	$346.75	$376.52	$339.34	$3,009.41
8) Total Payroll Related Expense for Each Employee
Employee	Dahlia	Trey	Kiesha	Chee	Total
Gross Pay	$                       2,400.00	$ 500.00	$      490.00	$ 440.00	$3,830.00
FICA - Social Security	43.40	31.00	30.38	27.28	132.06
FICA - Medicare	34.80	7.25	7.11	6.38	55.54
FUTA	-	-	-	2.64	2.64
SUTA	-	-	-	9.46	9.46
Health Insurance	34.00	34.00	34.00	34.00	136.00
Pension	192.00	40.00	39.20	35.20	306.40
Total Payroll Expense	$                       2,704.20	$ 612.25	$      600.69	$ 554.96	$4,472.10