Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first

Question

Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company's FUTA taxes are 0.6% and SUTA taxes are 2.15%. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the company's four employees Current Week Gross Pay Income Tax Gross Pay Withholding through Aug. 18 Name Dali Trey Kiesha Chee $115,850 116,500 8,800 2,750 $3,700 2,000 620 570 $ 525 322 54 43 In addition to gross pay, the company must pay one-half of the $94 per employee weekly health insurance; each employee pays the remaining one-half. The company also contributes an extra 8% of each employee's gross pay (at no cost to employees) to a pension fund Required: Compute the following for the week ended August 25. (Round your intermediate calculations and final answers to 2 decimal places.) 1) Employees FICA Withholdings for Social Security Earnings Subject to Tax Employee Tax Rate Tax Amount Trey Kiesha Total $ 0.00

Explanation / Answer

1.Employee FICA withholding for Social Secutiry Employee Employee earnings Tax rate Tax subject to tax Dali 2650.00 6.20% 164.30 Trey 2000.00 6.20% 124.00 Kiesha 620.00 6.20% 38.44 Chee 570.00 6.20% 35.34 Total 5840.00 362.08 2.Employee FICA withholding for Medicare Employee Employee earnings Tax rate Tax subject to tax Dali 3700.00 1.45% 53.65 Trey 2000.00 1.45% 29.00 Kiesha 620.00 1.45% 8.99 Chee 570.00 1.45% 8.27 Total 6890.00 99.91 3.Employer's FICA taxes for for Social Secutiry Employee Employee earnings Tax rate Tax subject to tax Dali 2650.00 6.20% 164.30 Trey 2000.00 6.20% 124.00 Kiesha 620.00 6.20% 38.44 Chee 570.00 6.20% 35.34 Total 5840.00 362.08 4.Employer's FICA taxes for Medicare Employee Employee earnings Tax rate Tax subject to tax Dali 3700.00 1.45% 53.65 Trey 2000.00 1.45% 29.00 Kiesha 620.00 1.45% 8.99 Chee 570.00 1.45% 8.27 Total 6890.00 99.91 5. Employer's FUTA taxes Employee Employee earnings Tax rate Tax Amount subject to tax Dali 0.00 0.60% 0.00 Trey 0.00 0.60% 0.00 Kiesha 0.00 0.60% 0.00 Chee 570.00 0.60% 3.42 Total 570.00 3.42 6. Employer's SUTA taxes Employee Employee earnings Tax rate Tax Amount subject to tax Dali 0.00 2.15% 0.00 Trey 0.00 2.15% 0.00 Kiesha 0.00 2.15% 0.00 Chee 570.00 2.15% 12.26 Total 570.00 12.26 Since the earnings limit for FUTA and SUTAtaxes is $7,000 FUTA and SUTA taxes are payable only on earnings of Chee. 7. Each employee's net (Take home) pay Employe Total Gross pay Withholdings Total Withholding Net Pay Income tax FICA Health Social cecurity Medicare Insurance Dahlia 3700.00 525.00 164.30 53.65 47.00 789.95 2910.05 Trey 2000.00 322.00 124.00 29.00 47.00 522.00 1478.00 Kiesha 620.00 54.00 38.44 8.99 47.00 148.43 471.57 Chee 570.00 43.00 35.34 8.27 47.00 133.61 436.40 Total 6890.00 944.00 362.08 99.91 188.00 1593.99 5296.02 8. Total pay related expenses for each employee : Employee Total Gross pay FICA FUTA SUTA Health Pension Total Social Medicare Insurance @8% of Security gross pay Dahlia 3700.00 164.30 53.65 0.00 0.00 47.00 296.00 560.95 Trey 2000.00 124.00 29.00 0.00 0.00 47.00 160.00 360.00 Kiesha 620.00 38.44 8.99 0.00 0.00 47.00 49.60 144.03 Chee 570.00 35.34 8.27 3.42 12.26 47.00 45.60 151.88 Total 6890.00 362.08 99.91 3.42 12.26 188.00 551.20 1216.86

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