Question

13. If an employee has a salary of $50,000 per year, and extra benefits of $7,200...

13. If an employee has a salary of $50,000 per year, and extra benefits of $7,200 per year, what is the direct cost of this employee for the firm considering a Social Security tax of 7.65%? Show your complete calculations. (2 points)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The direct cost of the employee for the firm are:

A. Salary of the employee = $50,000

B. Additional/ extra benefits = $7200

C. Employer's contribution to Social Security tax

=($50000 + $7200) = $57200 * 7.65% = $4375.80

Direct cost of the employee for the firm (A+B+C)

= $61575.80

Points to be noted;

(i) The social security tax shall be calculated on all incomes earned by employee.

(ii) The employee's portion of social security tax shall be collected by employer and paid to government.

Here, the employer shall work as an intermediary.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
junior is a roofing supervisor who earns $55000 per year and has deductions of $10000. he...
junior is a roofing supervisor who earns $55000 per year and has deductions of $10000. he has an opportunity to earn an extra $2500. Junior's average tax rate is 8% and his marginal tax rate is 12%for 2018. He and his employer each pay is 7.65% toward social security and medicare. how much is junior's after tax cash flow if he does the extra work?
Mr. & Mrs Smith are retired and receive Social Security Benefits of $18,000 per year. In...
Mr. & Mrs Smith are retired and receive Social Security Benefits of $18,000 per year. In addition, they received tax-exempt interest of $4,000. Determine the amount of taxable Social Security benefits assuming they also receive a taxable pension benefit of: Show and Label ALL work a) $25,000 b) $40,000
QUESTION HAS 2 PARTS 1. An employee earns $6,200 per month working for an employer. The...
QUESTION HAS 2 PARTS 1. An employee earns $6,200 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $210 in federal income taxes withheld....
The two employees of Red Co. receive various fringe benefits. Red Co. provides vacation at the...
The two employees of Red Co. receive various fringe benefits. Red Co. provides vacation at the rate of $315 per day. Each employee earns one day of vacation per month worked. In addition, Red Co. pays a total amount of $650 per month in medical insurance premiums. Red also contributes a total amount of $400 per month into an employee retirement plan. The federal unemployment tax rate is 6%, while the state tax rate is 4%. Unemployment taxes apply to...
The Cost of Benefits The cost of benefits accounts for more than 31 percent of the...
The Cost of Benefits The cost of benefits accounts for more than 31 percent of the total employee compensation package. Employee benefits are unique in that they have legal compliance aspects, they are institutionalized in most organizations, and they are complex. Employee benefits are important because they influence attraction, retention, retirement, and performance of employees. Organizations need to regularly examine their benefits package to ensure they are meeting employee needs in the best way possible. In this exercise, please read...
Caribbean Tours' total payroll for the month of January was $590,000. The following withholdings, fringe benefits,...
Caribbean Tours' total payroll for the month of January was $590,000. The following withholdings, fringe benefits, and payroll taxes apply:       Federal and state income tax withheld $ 59,000         Health insurance premiums paid by employer (payable to Blue Cross) 10,620         Contribution to retirement plan paid by employer (payable to Fidelity) 23,600         FICA tax rate (Social Security and Medicare) 7.65 %   Federal and state unemployment tax rate 6.20 %    Assume that none of the withholdings or payroll...
An employee earns $6,100 per month working for an employer. The FICA tax rate for Social...
An employee earns $6,100 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $206 in federal income taxes withheld. The employee has voluntary deductions...
For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income...
For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income tax withholding, Social Security tax, and Medicare tax. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation. 1. An employee works 37 regular hours during a workweek in August of 2018. He was hired four years ago, earns a salary of $135,100/year, and is exempt from the overtime provisions of the...
An employee has a salary of $200,000 a year. What is: The employer’s contribution for OASDI?...
An employee has a salary of $200,000 a year. What is: The employer’s contribution for OASDI? The amount of the employee’s contribution for OASDI? The employer’s contribution for the Medicare tax portion of FICA contributions? The employee’s contribution for the Medicare tax portion of FICA contributions?
Old Town Entertainment has two employees in Year 1. Clay earns $4,600 per month, and Philip,...
Old Town Entertainment has two employees in Year 1. Clay earns $4,600 per month, and Philip, the manager, earns $10,700 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 16 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT