Problem - Pardee Co. pays its employees each week. Its employees' gross pay is subject to these taxes.
Tax Rate Applied To
FICA - Social Security 6.20% First $102,000
FICA - Medicare 1.45 All gross pay
FUTA 0.80 First $7,000
SUTA 2.15 First $7,000
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 Gross Pay through 8/18 Current Week
Gross Pay Current Week
Income Tax Withholding
Dahlia $100,500 $3,600 $450
Trey 31,850 1,275 140
Kiesha 6,260 1,440 173
Chee 1,000 400 36
In addition to gross pay, the company must pay one-half of the $22 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 amounts to the nearest cent):
1. Each employee's FICA withholdings for Social Security.
2. Each employee's FICA withholdings for Medicare.
3. Employer's FICA taxes for Social Security.
4. Employer's FICA taxes for Medicare.
5. Employer's FUTA taxes.
6. Employer's SUTA taxes.
7. Each employee's net (take-home) pay.
8. Employer's total payroll-related expense for each employee.