The form on page 6-43 shows the amounts that appear in the Earnings to Date column
The form on page 6-43 shows the amounts that appear in the Earnings to Date column of the employees’ earnings records for 10 workers in Unger Company. These amounts represent the cumulative earnings for each worker as of October 11, the company’s last payday. The form also gives the gross amount of earnings to be paid each worker on the next payday, October 18.
In the state where Unger Company is located, the tax rates and bases are as follows:
Tax on Employees: | |
FICA—OASDI. . . . . . . . . . . . . . . . . . . . . . . . . | 4.2% on first $110,100 |
FICA—HI . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1.45% on total earnings |
SUTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 0.5% on first $8,000 |
Tax on Employer: | |
FICA—OASDI. . . . . . . . . . . . . . . . . . . . . . . . . | 6.2% on first $110,100 |
FICA—HI . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1.45% on total earnings |
FUTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 0.6% on first $7,000 |
SUTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1.8% on first $8,000 |
In the appropriate columns of the form on page 6-43, do the following:
1. Compute the amount to be withheld from each employee’s earnings on October 18 for (a) FICA—OASDI,
(b) FICA—HI, and (c) SUTA, and determine the total employee taxes.
2. Record the portion of each employee’s earnings that is taxable under FICA, FUTA, and SUTA, and calculate the total employer’s payroll taxes on the October 18 payroll.
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Solution: The form on page 6-43 shows the amounts that appear in the Earnings to Date column