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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