Answered

Westonci.ca is the premier destination for reliable answers to your questions, brought to you by a community of experts. Get the answers you need quickly and accurately from a dedicated community of experts on our Q&A platform. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Assume that social security taxes are payable at a 6.0% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 6.2% on the first $7,000 of earnings. If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800 , what is the total employer payroll taxes related to the current week?

Sagot :

lambaspandan

To calculate the total employer payroll taxes related to the current week, we need to consider the different types of taxes applicable:

Social Security Taxes:

Rate: 6.0%

Maximum earnings: No maximum

Employee's earnings for the week: $2,500

Year-to-date earnings before this week: $6,800

For Social Security taxes, the taxable amount for the current week is the lesser of the earnings for the week ($2,500) or the Social Security wage base limit ($142,800 for the year 2021).

Taxable amount for Social Security = $2,500

Social Security tax for the week = Taxable amount × Rate

= $2,500 × 0.06

= $150

Medicare Taxes:

Rate: 1.5%

No maximum earnings

Medicare tax for the week = Earnings for the week × Rate

= $2,500 × 0.015

= $37.50

Federal and State Unemployment Compensation Taxes:

Rate: 6.2%

Maximum taxable earnings: $7,000

The taxable earnings for state unemployment tax are limited to $7,000 per employee per year. Since the employee's year-to-date earnings before this week were $6,800, the taxable earnings for state unemployment tax in this week is:

Taxable

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.