Barbara is an employee of Baltimore Company. Baltimore Company pays employees the Friday after the wages are earned. Overtime in excess of 40 hours must be paid at 150% of the normal hourly rate. Social Security taxes are 6.2% and Medicare taxes are 1.45%. The federal unemployment tax rate is 1.0% and the state unemployment tax rate is 4.5%. Barbara's wages, including the current pay period, will not exceed the limits for Social Security, Medicare and unemployment taxes. Barbara earns $15 per hour and worked 50 hours for the week ended January 13 , 2019. Baltimore will withhold $220 federal income taxes. Use this information to determine the total payroll tax expense for Baltimore Company as related to Barbara's earnings. (Round to the closest cent)
As pr the given information,
Normal Wage rate=$15 per hr
overtime wage tare=$15*150%=$22.5 per hr
Barbara Normal Income=40*15= $600
Barbara Overtime income=10*22.5= $225
Total earnings=600+225=$825
Social security tax=825*6.2%=$51.15
Medicare taxes=825*1.45%=$11.96
federal unemployment tax=825*1.0%=$8.25
State Unemployment tax=825*4.5%=$37.13
Total payroll expense for Baltimore company is total of all taxes including extra $220 federal income taxes i.e
$51.15+$11.96+$8.25+$37.13 = $108.488
Hence, $108.448 will be the total payroll tax expense for Baltimore company other than $220 federal incme taxes.
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