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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

TOTAL COST OF EMPLOYEE Mandy Feng employs Jay Johnson at a salary of $35,000 a year. Feng is subject to employer Social Security taxes at a rate of 6.2% and Medicare taxes at a rate of 1.45% on Johnson’s salary. In addition, Feng must pay SUTA tax at a rate of 5.4% and FUTA tax at a rate of 0.6% on the first $7,000 of Johnson’s salary.

Compute the total cost to Feng of employing Johnson for the year.

To determine

Compute the total cost to Employer F for employing Person J for the year.

Explanation

Payroll tax:

Payroll tax refers to the tax that are equally contributed by employees and employer based on the salary and wages of an employee. Payroll tax includes taxes like federal tax, local income tax, state tax, social security tax and federal and state unemployment tax.

Compute the total cost to Employer F for employing Person J for the year...

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