Homework SoursePaloma Co has four employees FICA Social Security taxes are
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 $68 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 | $ | 117,800 | $ | 2,400 | $ | 341 | ||||||||
| Trey | 118,000 | 500 | 81 | |||||||||||
| Kiesha | 7,500 | 490 | 42 | |||||||||||
| Chee | 1,450 | 440 | 33 | |||||||||||
Solution
1) Employees\' FICA Withholdings for Social Security
| 1) Employees\' FICA Withholdings for Social Security | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | $700.00 | 6.20% | 43.40 | ||
| Trey | 500.00 | 6.20% | 31.00 | ||
| Kiesha | 490.00 | 6.20% | 30.38 | ||
| Chee | 440.00 | 6.20% | 27.28 | ||
| Total | $ 132.06 | ||||
| 2) Employees\' FICA Withholdings for Medicare | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | $2,400.00 | 1.45% | 34.80 | ||
| Trey | 500.00 | 1.45% | 7.25 | ||
| Kiesha | 490.00 | 1.45% | 7.11 | ||
| Chee | 440.00 | 1.45% | 6.38 | ||
| Total | $ 55.54 | ||||
| 3) Employer\'s FICA Taxes for Social Security | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | $700.00 | 6.20% | 43.40 | ||
| Trey | 500.00 | 6.20% | 31.00 | ||
| Kiesha | 490.00 | 6.20% | 30.38 | ||
| Chee | 440.00 | 6.20% | 27.28 | ||
| Total | $ 132.06 | ||||
| 4) Employer\'s FICA Taxes for Medicare | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | $2,400.00 | 1.45% | 34.80 | ||
| Trey | 500.00 | 1.45% | 7.25 | ||
| Kiesha | 490.00 | 1.45% | 7.11 | ||
| Chee | 440.00 | 1.45% | 6.38 | ||
| Total | $ 55.54 | ||||
| 5) Employer\'s FUTA Taxes | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | 0.60% | ||||
| Trey | 0.60% | ||||
| Kiesha | 0.60% | ||||
| Chee | 440 | 0.60% | 2.64 | ||
| Total | $ 2.64 | ||||
| 6) Employer\'s SUTA Taxes | |||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | ||
| Dahlia | 2.15% | ||||
| Trey | 2.15% | ||||
| Kiesha | 2.15% | ||||
| Chee | 440 | 2.15% | 9.46 | ||
| Total | $ 9.46 | ||||
| 7) Each Employee\'s Net (take-home) Pay | |||||
| Employee | Dahlia | Trey | Kiesha | Chee | Total |
| Gross Pay | $ 2,400.00 | $ 500.00 | $ 490.00 | $ 440.00 | $3,830.00 |
| Income tax withholding | 341.00 | 81.00 | 42.00 | 33.00 | 497.00 |
| FICA - Social Security | 43.40 | 31.00 | 30.38 | 27.28 | 132.06 |
| FICA - Medicare | 34.80 | 7.25 | 7.11 | 6.38 | 55.54 |
| Health Insurance | 34.00 | 34.00 | 34.00 | 34.00 | 136.00 |
| Net Pay | $1,946.80 | $346.75 | $376.52 | $339.34 | $3,009.41 |
| 8) Total Payroll Related Expense for Each Employee | |||||
| Employee | Dahlia | Trey | Kiesha | Chee | Total |
| Gross Pay | $ 2,400.00 | $ 500.00 | $ 490.00 | $ 440.00 | $3,830.00 |
| FICA - Social Security | 43.40 | 31.00 | 30.38 | 27.28 | 132.06 |
| FICA - Medicare | 34.80 | 7.25 | 7.11 | 6.38 | 55.54 |
| FUTA | - | - | - | 2.64 | 2.64 |
| SUTA | - | - | - | 9.46 | 9.46 |
| Health Insurance | 34.00 | 34.00 | 34.00 | 34.00 | 136.00 |
| Pension | 192.00 | 40.00 | 39.20 | 35.20 | 306.40 |
| Total Payroll Expense | $ 2,704.20 | $ 612.25 | $ 600.69 | $ 554.96 | $4,472.10 |
