Question

Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $128,400 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 5.4%. 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. Name Dali Trey Kiesha Chee Gross Pay through Aug. 18 $125,100 125,000 8,100 2,050 Current Week Income Tax Gross Pay Withholding $3,500 $ 426 3,400 379 1,800 48 1,600 38 In addition to gross pay, the company must pay one-half of the $80 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.):

Answer 1

1) Employees' FICA Withholdings for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3300	6.20%	204.60
Trey	3400	6.20%	210.80
Kiesha	1800	6.20%	111.60
Chee	1600	6.20%	99.20
		Total	626.20
2) Employees' FICA Withholdings for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	3500	1.45%	50.75
Trey	3400	1.45%	49.30
Kiesha	1800	1.45%	26.10
Chee	1600	1.45%	23.20
		Total	149.35
3) Employer's FICA Taxes for Social Security
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		6.20%
Dali	3300	6.20%	204.60
Trey	3400	6.20%	210.80
Kiesha	1800	6.20%	111.60
Chee	1600	6.20%	99.20
		Total	626.20
4) Employer's FICA Taxes for Medicare
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		1.45%
Dali	3500	1.45%	50.75
Trey	3400	1.45%	49.30
Kiesha	1800	1.45%	26.10
Chee	1600	1.45%	23.20
		Total	149.35
5) Employer's FUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		0.60%
Dali	0	0.60%	0
Trey	0	0.60%	0
Kiesha	0	0.60%	0
Chee	1600	0.60%	9.60
		Total	9.60
6) Employer's SUTA Taxes
Employee	Earnings Subject to Tax	Tax Rate	Tax Amount
Tax rate		5.40%
Dali	0	5.40%	0
Trey	0	5.40%	0
Kiesha	0	5.40%	0
Chee	1600	5.40%	86.40
		Total	86.40
7) Each Employee's Net (take-home) Pay
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	3500.00	3400.00	1800.00	1600.00	10300.00
Income tax withholding	426.00	379.00	48.00	38.00	891.00
FICA - Social Security	204.60	210.80	111.60	99.20	626.20
FICA - Medicare	50.75	49.30	26.10	23.20	149.35
Health Insurance	40.00	40.00	40.00	40.00	160.00
Net Pay	2778.65	2720.90	1574.30	1399.60	8473.45
8) Total Payroll Related Expense for Each Employee
Employee	Dali	Trey	Kiesha	Chee	Total
Gross Pay	3500.00	3400.00	1800.00	1600.00	10300.00
FICA - Social Security	204.60	210.80	111.60	99.20	626.20
FICA - Medicare	50.75	49.30	26.10	23.20	149.35
FUTA	0.00	0.00	0.00	9.60	9.60
SUTA	0.00	0.00	0.00	86.40	86.40
Health Insurance	40.00	40.00	40.00	40.00	160.00
Pension	280.00	272.00	144.00	128.00	824.00
Total Payroll Expense	4075.35	3972.10	2121.70	1986.40	12155.55