Question

a employer in Los angels, California, employs two individuals, whose taxable earnings to date are 920.00 and 5150.00 during the current tax period these employees earn 2,200.00 and 3000.00.

futa tax?

Answer 1

The 2018 FUTA tax rate is 6%. Federal unemployment tax only applies to the first $7,000 you pay to each employee in a calendar year. This $7,000 threshold is called the wage base. Employer Stops paying FUTA taxes on an employee’s wages once you pay the employee more than $7,000 in a year.

The largest FUTA tax amount you will pay per employee in 2018 is $420 ($7,000 x 0.06).

Employee A : combined earnings = 920+2200 = 3120 (less than 7000) .Hence FUTA tax = 2200*6%= $132

Employee B : combined earnings= 5150+3000=8150(greater than7000). hence FUTA tax = (7000-5150)*6% = $111