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Pied Piper has a taxable payroll of $500,000. The company is subject to Federal Unemployment Tax...

Pied Piper has a taxable payroll of $500,000. The company is subject to Federal Unemployment Tax Act (FUTA) at a rate of 6.2% and a state contribution rate of 5.4%. However, because of stable employment experience, Pied Piper’s state rate has changed to 2%. How much federal and state unemployment tax must Pied Piper pay, in total?

$58,500
$41,000
$20,000
$14,000
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Answer #1

D. $14,000

Federal and state unemployment tax = [(.062 - .054) + .02] × $500,000 = $14,000

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