Question

Exercise 11-13 (Part Level Submission) According to a payroll register summary of Frederickson Company, the amount of employees’ gross pay in December was $882,700, of which $88,500 was not subject to Social Security taxes of 6.2% and $776,200 was not subject to state and federal unemployment taxes.

Collapse question part (a)

Determine the employer’s payroll tax expense for the month, using the following rates: FICA 7.65%, state unemployment 5.4%, and federal unemployment 0.8%. (Round answer to 0 decimal places, e.g. 125.)

Payroll tax expense=

Answer 1

Calculation of Payroll Tax

FICA tax = ( Gross Pay – not subject to Social security Tax) * FICA Tax rate

= ($882700 - $88500) * 7.65%

= $60,756

State Unemployment Tax =

(Gross Pay – not subject to state & federal unemployment tax)* State unemployment tax

= ($882700 - $776200) * 5.40%

= $5751

Federal Unemployment Tax =

(Gross Pay – not subject to state & federal unemployment tax)* Federal unemployment tax

= ($882700 - $776200) * 0.80%

= $852

Payroll Tax = FICA tax + State Unemployment tax + federal unemployment tax

= $60,756 + $5751 +$852

= $67,359