For payroll period ending May 31, 2019, gross pay was $600,000 and the following taxes and withholdings were deducted:

For payroll period ending May 31, 2019, gross pay was $600,000 and the following taxes and withholdings were deducted:
FICA tax 7.65%
Federal tax 20%
State tax 3%
Health insurance premiums $50,000
401(k) retirement contribution 5%
Charitable contribution $15,000
Wage garnishment for IRS debt $1,100

a. Calculate the total payroll taxes and withholdings liability (total amount withheld) on May 31, 2019.

b. Calculate the net wages payable to employees on May 31, 2019.

Solutions

Expert Solution

Calculation of Payroll Taxes and withholdings:

1. Total Payroll Tax:

The total payroll tax includes FICA: 6,00,000*7.65%= 45900

Total Withholdings: federal tax+State tax+Retirement contribution+ health insurance premium+FICA

=1,20,000+18,000+30,000+50,000+45,900

=2,63,900

2. Net wages payable:

Gross pay : 6,00,000

Deducte:

FICA @ 7.65%=45,900

Federal Tax @20%=1,20,000

State Tax @3% =18,000

Health inusrance premium: 50,000

Retirement contribution @5%=30,000

Charitable contribution: 15,000

Wage garnishment :1100

Total deductions: 2,80,000

Net wage payable: Gross salary- Deductions

= 6,00,000-2,80,000

= 3,20,000

ekkarill92 answered 1 year ago

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