Question

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BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $128,400 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to its employee.

	Gross Pay through August 31					Gross Pay for September
a.		$	6,500				$	900
b.			2,050					2,150
c.			122,200					8,100

a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA—Social Security		6.20%
FICA—Medicare		1.45%
FUTA		0.60%
SUTA		5.40%
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA—Social Security
FICA—Medicare
FUTA
SUTA
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA—Social Security
FICA—Medicare
FUTA
SUTA

Answer 1

a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	900	6.20%	55.80
FICA-Medicare	900	1.45%	13.05
FUTA	500	0.60%	3.00
SUTA	500	5.40%	27.00
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	2150	6.20%	133.30
FICA-Medicare	2150	1.45%	31.18
FUTA	2150	0.60%	12.90
SUTA	2150	5.40%	116.10
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	6200	6.20%	384.40
FICA-Medicare	8100	1.45%	117.45
FUTA	0	0.60%	0.00
SUTA	0	5.40%	0.00
Note: Earnings taxable for FUTA and SUTA in (a) = 7000-6500 = $500
Note: Earnings taxable for Social Security in (c) = 128400-122200 = $6200