(Computing payroll taxes) BMX Company has one employee. FICA Social Security tax

Question

(Computing payroll taxes)

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $117,000 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c). (Round amounts to cents).

     Gross Pay through August          Gross Pay for September

a.    $6,400                                                   $800

b.    $18,200                                                 $2,100

c.    $110,700                                                $8,000

Explanation / Answer

a.

b.

c.

FICA—Social Security $49.60 800*6.2/100 FICA—Medicare $11.60 800*1.45/100 FUTA $4.8 7000-6400=600*0.8/100 SUTA $17.4 7000-6400=600*2.9/100

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