An employee earns $5,850 per month working for an employer. The FICA tax rate fo

Question

An employee earns $5,850 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $196 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $164 and contributes $82 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January? (Round your intermediate calculations to two decimal places.)

Explanation / Answer

FICA tax rate for Social Security 6.20% FICA tax rate for Medicare 1.45% The current FUTA tax rate 0.80% SUTA tax 5.40% Earning Per month $5,850 Calculation FICA tax for Social Security : 5850*6.20% $362.70 FICA tax for Medicare : 5850*1.45% $84.83 FUTA tax : (5850*0.80%) $46.80 SUTA tax (5850*5.40%) $315.90 TOTAL PAY ROLL EXPENSE $810.23

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