Chapter 11, Problem 9E

To determine

Payroll Taxes:

The taxes liable on wages earned by employees during specified period of time are payroll taxes.

To determine:

1. Prepare a table to compute the amounts of payroll taxes of each employee.

2. Compute the total for FICA Social Security taxes, FICA Medicare taxes, FUTA taxes, and SUTA taxes.

Answer to Problem 9E

Solution:

1.

Employee	Cumulative Pay	FICA Social Security	FICA Medicare	FUTA	SUTA
Ken S.	$6,000	$372	$87	$36	$324
Tim. V	$60,200	$3732.40	$872.90	$361.20	$378
Steve S.	$87,000	$5,394	$1,261.50	$522	$378
Ann T.	$146,500	$7,254	$1,696.50	$879	$378
Kathleen K.	$106,900	$6,627.80	$1,550.05	$641.40	$378
Michelle H.	$117,000	$7,254	$1,696.50	$702	$378
Lori K.	$119,500	$7,254	$1,696.50	$717	$378
Kitty O.	$36,900	$2,287.80	$535.05	$221.40	$378
John W.	$4,000	$248	$58	$24	$216
	$684,000	$40,424	$9,454	$4,104	$3,186

2.

Payroll Taxes	Employee	Employer	Total Tax
FICA Social Security	$40,424		71%
FICA Medicare	$9,454		16.5%
FUTA		$4,104	7%
SUTA		$3,186	5.5%

Explanation of Solution

Explanation:

1. FICA Social Security

Employee	Subject to Tax	Tax Rate	Amount
Ken S.	$6,000	6.2%	$372
Tim. V	$60,200	6.2%	$3732.40
Steve S.	$87,000	6.2%	$5,394
Ann T.	$117,000	6.2%	$7,254
Kathleen K.	$106,900	6.2%	$6,627.80
Michelle H.	$117,000	6.2%	$7,254
Lori K.	$117,000	6.2%	$7,254
Kitty O.	$36,900	6.2%	$2,287.80
John W.	$4,000	6.2%	$248
			$40,424

FICA Medicare

Employee	Subject to Tax	Tax Rate	Amount
Ken S.	$6,000	1.45%	$87
Tim. V	$60,200	1.45%	$872.90
Steve S.	$87,000	1.45%	$1,261.50
Ann T.	$117,000	1.45%	$1,696.50
Kathleen K.	$106,900	1.45%	$1,550.05
Michelle H.	$117,000	1.45%	$1,696.50
Lori K.	$117,000	1.45%	$1,696.50
Kitty O.	$36,900	1.45%	$535.05
John W.	$4,000	1.45%	$58
			$9,454

FUTA Taxes

Employee	Subject to Tax	Tax Rate	Amount
Ken S.	$6,000	0.6%	$36
Tim. V	$60,200	0.6%	$361.20
Steve S.	$87,000	0.6%	$522
Ann T.	$146,500	0.6%	$879
Kathleen K.	$106,900	0.6%	$641.40
Michelle H.	$117,000	0.6%	$702
Lori K.	$119,500	0.6%	$717
Kitty O.	$36,900	0.6%	$221.40
John W.	$4,000	0.6%	$24
			$4,104

SUTA Taxes

Employee	Subject to Tax	Tax Rate	Amount
Ken S.	$6,000	5.4%	$324
Tim. V	$7,000	5.4%	$378
Steve S.	$7,000	5.4%	$378
Ann T.	$7,000	5.4%	$378
Kathleen K.	$7,000	5.4%	$378
Michelle H.	$7,000	5.4%	$378
Lori K.	$7,000	5.4%	$378
Kitty O.	$7,000	5.4%	$378
John W.	$4,000	5.4%	$216
			$3,186

2.

Payroll Taxes	Amount	Percent
FICA Social Security	$40,424	71%
FICA Medicare	$9,454	16.5%
FUTA	$4,104	7%
SUTA	$3,186	5.5%
Total	$57,168	100%

Conclusion

Conclusion:

The payroll tax to be paid by employee is $49,878 and employer is $7,290.