Question

Pina Hardware Company’s payroll for November 2017 is summarized below.

					Amount Subject to Payroll Taxes
						Unemployment Tax
Payroll		Wages Due		FICA		Federal		State
Factory		$124,400		$124,400		$36,900		$36,900
Sales		31,100		31,100		3,900		3,900
Administrative		37,200		37,200
Total		$192,700		$192,700		$40,800		$40,800

At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $118,500 and 1.45% in excess of $118,500. Of the $192,700 wages subject to FICA tax, $20,200 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,300 for factory, $6,900 for sales, and $5,800 for administrative.

Prepare a schedule showing the employer’s total cost of wages for November by function.

Answer 1

	Factory	Sales	Administrative	Total
Salaries and Wages	124400	31100	37200	192700
FICA taxes	9517	1127	2846	13490
FUTA Taxes	295	31	0	326
SUTA Taxes	923	98	0	1021
Total Cost	135135	32356	40046	207537
Workings:
	Factory	Sales	Administrative
FICA taxes	=124400*7.65%	=(31100-20200)*7.65%+(20200*1.45%)	=37200*7.65%
FUTA Taxes	=36900*0.8%	=3900*0.8%	0
SUTA Taxes	=36900*2.5%	=3900*2.5%	0