Question

1. The chief executive officer earns $10,100 per month. As of May 31, her gross pay was $50,500. The tax rate for Social Security is 6.2% of the first $128,400 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. What is the amount of FICA-Social Security withheld from this employee for the month of June?

2. An employee earned $62,400 during the year working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 of employee earnings per 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. What is the amount of total unemployment taxes the employee must pay?

3. Belkin Co. provides medical care and insurance benefits to its retirees. In the current year, Belkin agrees to contribute 5% of the employees’ $390,000 gross salaries to a retirement program. What is the amount of employee benefits expense for the current period?

Answer 1

Answer 1:

FICA is a tax deducted from employees pays consist of 2 types of taxes FICA social security tax @ 6.2% and medicare Tax @1.45%. SO the FICA Social security tax is 6.2% upto a Gross pay od $128,400 for the year. here CEO gross annual income is $121,200 (10,100 *12).

So tax is to be deducted : $10,100 *6.2% = $626.2

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