Question

Mest Company has nine employees. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Cumulative pay for the current year for each of its employees follows.
Employee Cumulative Pay Employee Cumulative Pay Employee Cumulative Pay
Ken S $ 6,300 Michelle W $ 153,000 Lori K $ 140,400
Tim V 49,900 Michael M 116,400 Kitty O 46,400
Steve S 96,500 Zach R 137,900 John W 13,500
a. Compute the amounts in this table for each employee.
b. For the company, compute each total for FICA Social Security taxes, FICA Medicare taxes, FUTA taxes, and SUTA taxes.

Answer 1

Mest Company is responsible to pay the payroll taxes for its employees with $44,280 FICA-SS, $10,355.90 FICA-Med, $373.80 FUTA, and $3,364 SUTA.

Using data from the case, we know that:

Payrol Taxes  Tax rate  Tax limits

FICA-SS  6.20%  $128,400

FICA-Med  1.45%  All gross pay

FUTA  0.60%  $7,000

SUTA  5.40%  $7,000

Next, we need to find each employee's pay subjected to each payroll taxes based on each tax limits. If an employee's wage is within the tax limit, then all of his wage is subjected to the tax. But if his wage is above the tax limit, than the pay subjected to tax would be equal to the tax limiT.

                                                             Pay Subjected to:

Employee    Cumm. pay     FICA-SS      FICA-Med     FUTA     SUTA

Ken S.           $6,300        $6,300         $6,300     $6,300   $6,300

Michelle W.  $153,000    $128,400      $153,000  $7,000   $7,000

Lori K.           $140,400    $128,400      $140,400  $7,000   $7,000

Tim V            $49,900     $49,900       $49,900   $7,000   $7,000

Michael M.    $116,400    $116,400       $116,400  $7,000   $7,000

Kitty O.          $46,400     $46,400       $46,400   $7,000   $7,000

Steve S        $96,500      $96,500       $96,500  $7,000    $7,000

Zach            $137,900     $128,400      $137,900  $7,000    $7,000

John            $13,500       $13,500        $13,500    $7,000     $7,000

Total            $760,300    $714,200     $760,300  $62,300  $62,300

Then, we can find the payroll taxes charged for each employee based on their pay subjected to taxes.

Employee       FICA-SS      FICA-Med     FUTA        SUTA

Ken S.            $390.60      $91.35          $37.80     $340.20

Michelle W.   $7,960.80    $1,861.80     $42          $378

Lori K.            $17.960.80  $1,861.80      $42         $378

Tim V             $3,093.80  $723.55         $42         $378

Michael M.    $7,216.80   $1687.80        $42         $378

Kitty O.          $2,876.80  $672.80         $42          $378

Steve S         $5,983        $1,399.25      $42          $378

Zach              $7960.80  $1,861.80        $42          $378

John              $837          $195.75           $42          $378

Total              $44,280    $10,355.90      $373.80  $3,364.20

Learn more about Payroll Taxes here: https://brainly.com/question/9387697

#SPJ4