Question

Bailey Plyler has three employees in his carpet cleaning business. The payroll is semimonthly and the employees earn ​$​750, ​$​840, and ​$1035 per pay period. Based on the fact that the employer is required to pay the SUTA​ tax, calculate when and in what amounts FUTA tax payments are to be made for the year.

Answer 1

Solution:-

As of 2020, the FUTA tax rate was 6% of the first $7,000 paid for each employee.

Once an employee’s annual wages exceed $7,000, an employer stops paying FUTA for that employee.

Employee Wages for Per 15 Days Annual Wages

1 $ 750 $ 750 X 24 = $ 18,000 FUTA Not Applicable

2 $ 840 $ 840 X 24 = $ 20,160 FUTA Not Applicable

3 $ 1,035 $ 1,035 X 24 = $ 24,840 FUTA Not Applicable

In this case all three employee's annual wages exceeding $ 7000, so employer is not laible to pay FUTA .