The last monthly payroll of Adventure Amusement Parks was 14

The last monthly payroll of Adventure Amusement Parks was $148,200 for 76 employees. Of the total, $988 was for payments to employees in excess of the $7,000 wage base. What were the total FUTA and SUTA taxes for the payroll? The company\'s SUTA rate is 5.4% and its FUTA rate is 6% less the 5.4% SUTA credit.

Solution

FUTA and SUTA taxes are payable on earnings with a limit of $7,000.

Hence in the instant case, FUTA and SUTA taxes are payable on $147,212

The taxes will be as under.

SUTA tax 5.4% of $147,212 = $7,949,.45

FUTA tax (6.0% - 5.4%) ie., 0.6% of $147,212 = $883.27