Question

Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $9288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1541.17. What is the amount of the employer's payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

$42.00 $575.86 $1130.54 $134.68 $378.00

Answer 1

Answer: $1,130.54

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*Social Security tax and Medicare tax are the payroll taxes that are paid by both the employee and the employer.
*Unemployment taxes (FUTA & SUTA) are paid by the employer only. Maximum salary subject to these taxes is $7,000.

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Computation of employer's payroll taxes expenses
	Amount	Amount
FICA taxes:
Social Security tax    [$9,288 x 6.2%]	575.86
Medicare tax             [$9,288 x 1.45%]	134.68
Total FICA tax		710.54
Unemployement taxes:
FUTA tax                  [$7,000 x 0.6%]	42
SUTA tax                  [$7,000 x 5.4%]	378
Total unemployment tax		420
Total payroll taxes expense		1130.54

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