In: Accounting
The following totals for the month of April were taken from the payroll register of Magnum Company.: salaries $12,000, Federal $2500, FICA Rate 7.5%, FUTA .8%, SUTA 5.4%. Net Pay would be. Please include all steps. Thanks.
Answer: $8,600
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Calculation of Net pay | ||
Gross pay | $12,000 | |
Payroll withholdings / deductions: | ||
Federal Income tax withholding | $2,500 | |
FICA tax [$12,000 x 7.5%] | $900 | |
Total payroll withholdings / deductions [$2,500 + $900] | $3,400 | |
Net pay [Gross pay - Total payroll deductions = $12,000 - $3,400] | $8,600 | |
Note: An employer does not withhold any amount from the employees salary towards the unemployment taxes.(FUTA and SUTA) |