Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned atotal of $8,260. The FICA tax for social security is 6.2% of the first $132,900 earned each calendar year andthe FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld fromher earnings was $1,325.17. What is the total amount of taxes withheld from the Portia's earnings?

Gross earnings$8260Less: DeductionsSocial security tax$512.12= $8260*6.2%Medicare tax$119.77=…

Answered: Portia Grant is an employee who is paid…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter9: Payroll Accounting: Employer Taxes And Reports

Section: Chapter Questions

Problem 1CP

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For tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000 for the unemployment tax and that all earnings are taxable for Medicare. For the payroll register for the month of November for Shelby, Inc., determine the taxable earnings for each employee.
Payrex Co. has six employees. All are paid on a weekly basis. For the payroll period ending January 7, total employee earnings were 12,500, all of which were subject to SUTA, FUTA, Social Security, and Medicare taxes. The SUTA tax rate in Payrexs state is 5.4%, but Payrex qualifies for a rate of 2.0% because of its good record of providing regular employment to its employees. Other employer payroll taxes are at the rates described in the chapter. REQUIRED 1. Calculate Payrexs FUTA, SUTA, Social Security, and Medicare taxes for the week ended January 7. 2. Prepare the journal entry for Payrexs payroll taxes for the week ended January 7. 3. What amount of payroll taxes did Payrex save because of its good employment record?
Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows. Lemurs payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay. Record the entry for the employee payroll on December 31.
During the year, employee Sean Matthews earned wages in the amount of 250,000. Discuss how the employees HI tax will differ from the employers HI tax for this employee.

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