Question

1. What is the FUTA tax and what percentage is it assessed? 2. Who pays FICA?What...

1. What is the FUTA tax and what percentage is it assessed?
2. Who pays FICA?What are the percentages and limits on the payments?

Homework Answers

Answer #1

1.) The FUTA Tax Rate is 6.0%. The tax applies to the first $7,000 you paid to each employee as wages during the year. The $7,000 is often referred to as the federal or FUTA wage base.

2.) Employers and employees split the tax. For both of them, the current Social Security and Medicare Tax rates are 6.2% and 1.45%, respectively. So each party pays 7.65% of their income, for a total FICA contribution of 15.3%. To calculate the FICA tax burden, you can multiply your gross pay by 7.65%.

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