A company has four employees who each work 40 hours per week and earn $38 per hour. Federal tax on the total wages for all four employees is $742 and state tax is $340. Social Security tax withheld from employees is 6.2% and Medicare tax is 1.45% of gross pay. Federal unemployment tax is .8% and state unemployment tax is 5.4% of gross pay. What is the total amount of payroll tax expense that the employer must pay for one week's wages? (Round to the nearest cent.)

A company has four employees who each work 40 hours per week and earn $38 per hour. Federal tax on the total wages for all four employees is $742 and state tax is $340. Social Security tax withheld from employees is 6.2% and Medicare tax is 1.45% of gross pay. Federal unemployment tax is .8% and state unemployment tax is 5.4% of gross pay. What is the total amount of payroll tax expense that the employer must pay for one week's wages? (Round to the nearest cent.)

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter8: Employer Taxes, Payments, And Reports

Section: Chapter Questions

Problem 3E

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Payrex Co. has six employees. All are paid on a weekly basis. For the payroll period ending January 7, total employee earnings were 12,500, all of which were subject to SUTA, FUTA, Social Security, and Medicare taxes. The SUTA tax rate in Payrexs state is 5.4%, but Payrex qualifies for a rate of 2.0% because of its good record of providing regular employment to its employees. Other employer payroll taxes are at the rates described in the chapter. REQUIRED 1. Calculate Payrexs FUTA, SUTA, Social Security, and Medicare taxes for the week ended January 7. 2. Prepare the journal entry for Payrexs payroll taxes for the week ended January 7. 3. What amount of payroll taxes did Payrex save because of its good employment record?
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On January 21, the column totals of the payroll register for Great Products Company showed that its sales employees had earned 14,960, its truck driver employees had earned 10,692, and its office employees had earned 8,670. Social Security taxes were withheld at an assumed rate of 6.2 percent, and Medicare taxes were withheld at an assumed rate of 1.45 percent. Other deductions consisted of federal income tax, 3,975, and union dues, 560. Determine the amount of Social Security and Medicare taxes withheld and record the general journal entry for the payroll, crediting Salaries Payable for the net pay. All earnings were taxable. Round amounts to the nearest penny.
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