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

ID: 2582076 • Letter: P

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.

In addition to gross pay, the company must pay one-half of the $92 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.):

Current Week Name Gross Pay
through Aug. 18 Gross Pay Income Tax Withholding Dali $ 115,800 $ 3,600 $ 511 Trey 116,450 2,050 330 Kiesha 8,700 610 53 Chee 2,650 560 42

Explanation / Answer

Answer 1. Employees' FICA Withholdings for Social Security Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                 2,700.00 6.20%                 167.40 ($118,500 - $115,800) Trey                                 2,050.00 6.20%                 127.10 ($118,500 - $116,450) Kiesha                                    610.00 6.20%                   37.82 Chee                                    560.00 6.20%                   34.72 Total                 367.04 Answer 2. Employees' FICA Withholdings for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                 3,600.00 1.45%                   52.20 Trey                                 2,050.00 1.45%                   29.73 Kiesha                                    610.00 1.45%                      8.85 Chee                                    560.00 1.45%                      8.12 Total                   98.89 Answer 3. Employers' FICA Taxes for Social Security Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                 2,700.00 6.20%                 167.40 ($118,500 - $115,800) Trey                                 2,050.00 6.20%                 127.10 ($118,500 - $116,450) Kiesha                                    610.00 6.20%                   37.82 Chee                                    560.00 6.20%                   34.72 Total                 367.04 Answer 4. Employers' FICA Taxes for Medicare Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                 3,600.00 1.45%                   52.20 Trey                                 2,050.00 1.45%                   29.73 Kiesha                                    610.00 1.45%                      8.85 Chee                                    560.00 1.45%                      8.12 Total                   98.89 Answer 5. Employers' FUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                              -   0.60%                          -   Trey                                              -   0.60%                          -   Kiesha                                              -   0.60%                          -   Chee                                    560.00 0.60%                      3.36 Total                      3.36 Answer 6. Employers' SUTA Taxes Employee Earnings Subject to Tax Tax Rate Tax Amount Dahlia                                              -   2.15%                          -   Trey                                              -   2.15%                          -   Kiesha                                              -   2.15%                          -   Chee                                    580.00 2.15%                   12.47 Total                   12.47 Answer 7. Employee Dahlia Trey Kiesha Chee Total Gross Pay                                 3,600.00              2,050.00                 610.00               560.00            6,820.00 Income Tax Withholding                                    511.00                  330.00                   53.00                 42.00               936.00 FICA - Social Security                                    167.40                  127.10                   37.82                 34.72               367.04 FICA - Medicare                                       52.20                    29.73                      8.85                    8.12                  98.89 Health Insurance                                       46.00                    46.00                   46.00                 46.00               184.00 Net Pay                                 2,823.40              1,517.18                 464.34               429.16            5,234.07 Answer 8. Employee Dahlia Trey Kiesha Chee Total Gross Pay                                 3,600.00              2,050.00                 610.00               560.00            6,820.00 FICA - Social Security                                    167.40                  127.10                   37.82                 34.72               367.04 FICA - Medicare                                       52.20                    29.73                      8.85                    8.12                  98.89 FUTA                                              -                             -                            -                      3.36                    3.36 SUTA                                              -                             -                            -                   12.47                  12.47 Health Insurance                                             46                          46                         46                       46               184.00 Pension - 8%                                    288.00                  164.00                   48.80                 44.80                  48.00 Total Payroll Exenses                                    553.60                  366.83                 141.47               149.47               713.76