An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employeeâs pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.) Multiple Choice
$4,827.00
$4,672.25
$4,628.25
$4,386.25
$4,430.25
An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employeeâs pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.) Multiple Choice
$4,827.00
$4,672.25
$4,628.25
$4,386.25
$4,430.25
Related questions
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
| Gross Pay through August | Gross Pay for September | |
| a. | $ 6,400 | $ 800 |
| b. | $ 18,200 | $ 2,100 |
| c. | $ 112,200 | $ 8,000 |
Compute BMXâs amounts for each of these four taxes as applied to the employeeâs gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)
a.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
b.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
c.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
d.) Assuming situation a, prepare the employerâs September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employeeâs federal income taxes withheld by the employer are $80 for this pay period. (Round your answers to 2 decimal places.)
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
| September Earnings Subject to Tax | Tax Rate | Tax Amount | |
| Federal income tax | |||
| ------------------------- | ---------------------------------------------- | ----------- | Total: |
e. Prepare the employer's September 30 journal entry to record accrued salary expense and its related payroll liabilities for this employee.
| DATE | GENERAL JOURNAL | DEBIT | CREDIT |
| Sep 30 | |||
f.) Assuming situation a, prepare the employerâs September 30 journal entries to record the employerâs payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)
| Employer Payroll Taxes | September earnings subject to tax | Tax Rate | Tax Amount |
| ------------------------------ | --------------------------------------------- | ----------- | Total: |
g.)
| DATE | GENERAL JOURNAL | DEBIT | CREDIT |
| Sep 30 | |||
Paloma Co. Stars has four employees. FICA Social Security taxesare 6.2% of the first $110,100 paid to each employee, and FICAMedicare taxes are 1.45% of gross pay. Also, its FUTA taxes are0.8% and SUTA taxes are 2.15% of the first $7,000 paid to eachemployee. The company is preparing its payroll calculations for theweek ended August 25. Payroll records show the followinginformation for the companyâs four employees.
name | Gross Pay 8/18 | Gross Pay | Income Tax Withholding |
| Dahlia | 107,200 | 3800 | 276 |
| Trey | 36250 | 820 | 137 |
| Kiesha | 8000 | 630 | 57 |
| Chee | 1950 | 580 | 48 |
In addition to gross pay, the company must pay one-half of the$60 per employee weekly health insurance; each employee pays theremaining one-half. The company also contributes an extra 8% ofeach employeeâs gross pay (at no cost to employees) to a pensionfund.
Required:
Compute the following for the week ended August 25 (Round youranswers 2 decimal places)
Employee | Earnings subject to tax | Tax rate | Tax amount |
| Dahlia | |||
| Trey | |||
| Kiesha | |||
| Chee |
2)Emmployees' FICA withholding for Medicare
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount |
| Dahlia | |||
| Trey | |||
| Kiesha | |||
| Chee |
3)Employer's FICA taxes for Social Security
| Employee | Earnings subject to tax | tax rate | tax amount |
| Dahlia | |||
| Trey | |||
| Kiesha | |||
| Chee |
4) Employer's FICA taxes for Medicare
| Employee | Earnings subject to Tax | Tax Rate | Tax Amount |
| Dahlia | 1.45 | ||
| Trey | 1.45 | ||
| Kiesha | 1.45 | ||
| Chee | 1.45 |
5)Employer's FUTA taxes
| Employee | Earnings subject to tax | Tax Rate | Tax Amount |
| Dahlia | .8 | ||
| Trey | .8 | ||
| Kiesha | .8 | ||
| Chee | .8 |
6) Employer's SUTA taxes
| Employee | Earnings subhect to tax | Tax Rate | Tax Amount |
| Dahlia | 2.15 | ||
| Trey | 2.15 | ||
| Kiesha | 2.15 | ||
| Chee | 2.15 |
7) Each employee's net (take-home) pay
| Employee | Dahlia | Trey | Kiesha | Chee | Total |
| Gross Pay | 3800 | 820 | 630 | 580 | 5830 |
| Income Tax Withholding | 276 | 137 | 57 | 48 | 518 |
| FICA -SS | |||||
| FICA - Medicare | |||||
| Health Insurance | |||||
| Net Pay |
8) Total payroll related expense for each employee
| Employee | Dahlia | Trey | Kiesha | Chee | Total |
| Gross Pay | 3800 | 820 | 630 | 580 | 5830 |
| FICA - SS | |||||
| FICA -Medicare | |||||
| FUTA | |||||
| SUTA | |||||
| Health Insurance | |||||
| Pension | |||||
| Total Payroll Expense |
