Templin company pays its employees each week. Its employees gross pay is subject

Question

Templin company pays its employees each week. Its employees gross pay is subject to these taxes:

*Maximum earnings for 2015

The company is preparing its payroll calculations for the week ended August 15. 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 $340 per employee weekly health insurances; each employee pays the remaining one half. the company also contributes an extra 5% of each emplyees gross pay (at no cost to employees) to a pension fund.

Compute the following for the week ended August 12 (round amounts to the nearest cent):

1. Each employee's FICA withholdings for Social Security.

2.Each employee's FICA withholdings for medicare

3. Employer's FICA taxes for Social Security.

4. Employer's FICA taxes for medicare.

5. Employer's FUTA taxes.

6. Employer's SUTA taxes.

7. Each employee's net (take-home) pay.

8. Employer's total payroll-related expense for each employee.

9.Make the necessary payroll and payroll expenses entries.

Tax: Rate: Applied to: FICA - Social Securtiy 6.20% First $118,500 FICA - Medicare 1.45% All gross pay FUTA 0.80% First $7000 SUTA 3.50% First $7000

Explanation / Answer

Answer 1: Empoyee's FICA withholdings for social security

Name Grosspay up to August 8th = Column A Gross Pay for Week Ended on 15th August = Column B Column B1 = Employer's contribution for health insurance fix amount Column B2 = Employer's contribution for health 5% of gross pay= (Column B x 5%) Column B3 = Employees contribution for health insurance fix amount Total weekly Gross pay after deducting health insurance premium = Column C = Column B -(Column B1 + Column B2 + Column B3) Total Gross pay for the year (including gross pay for week ended on 15th August) = Column D (Column A + Column C) FICA social secruity withholding = Column C x 6.20% Explanation Note:FICA Social Security is applicable for first $118,500 only, in case of gross pay exceeds ths limit than for an additional amount of gross pay FICA social security is not applicable. Jasper $      71,000.00 $           3,600.00 $170 $               180.00 $170 $3,080 $                                      74,080.00 $                                            190.96 Matilda $    116,000.00 $           4,000.00 $170 $               200.00 $170 $3,460 $                                    119,460.00 $                                            214.52 In case of Matilda, when gross pay for week ended on 15th August is paid, the total amount year to date exceeds FICA social security $ 118,500. So we can deduct FICA social security amount from $ 2500 only ($118500-$119460) & for an additional $ 960 FICA security will not be deducted. HOmer $        5,500.00 $           1,600.00 $170 $                 80.00 $170 $1,180 $                                        6,680.00 $                                              73.16 Gertrude $        3,500.00 $           1,300.00 $170 $                 65.00 $170 $895 $                                        4,395.00 $                                              55.49

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