Question

Mest Company has nine employees. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Cumulative pay for the current year for each of its employees follows.

Employee	Cumulative Pay		Employee	Cumulative Pay		Employee	Cumulative Pay
Ken S	$	5,700	Michelle W	$	150,000	Lori K	$	137,400
Tim V		46,900	Michael M		113,400	Kitty O		43,400
Steve S		93,500	Zach R		134,900	John W		10,500

a. Compute the amounts in this table for each employee.
b. For the company, compute each total for FICA Social Security taxes, FICA Medicare taxes, FUTA taxes, and SUTA taxes.

Answer 1

a.)

Employee	Cumulative pay	Pay subject to FICA social security	Pay subject to FICA medicare	Pay subject to FUTA taxes	Pay subject to SUTA taxes
Ken S	5,700	5,700	5,700	5,700	5,700
Tim V	46,900	46,900	46,900	7,000	7,000
Steve S	93,500	93,500	93,500	7,000	7,000
Michelle W	150,000	128,400	150,000	7,000	7,000
Michael M	113,400	113,400	113,400	7,000	7,000
Zach R	134,900	128,400	134,900	7,000	7,000
Lori K	137,400	128,400	137,400	7,000	7,000
Kitty O	43,400	43,400	43,400	7,000	7,000
John W	10,500	10,500	10,500	7,000	7,000
Totals	735,700	698,600	735,700	61,700	61,700

Maximum wage limt for FICA social security taxes is $128,400. Hence for Michale W, Zach R and Lori K pay subjet to social security tax is 128,400.

b.)

	Tax paid by employee	Tax paid by employer	Total tax
FICA social security	43,313	43,313	86,626
FICA medicare taxes	10,668	10,668	21,336
FUTA taxes	-	370	370
SUTA taxes	-	3,332	3,332

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