BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500...
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BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
Gross Pay through August
Gross Pay for September
a.
$
6,600
$
500
b.
18,400
2,300
c.
112,400
8,200
Exercise 9-5 Computing payroll taxes LO P2, P3
Compute BMXs amounts for each of these four taxes as applied to the employees gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)
a)
Tax
September Earnings Subject to Tax
Tax Rate
Tax Amount
FICASocial Security
$500.00
6.20%
$31.00
FICAMedicare
500.00
1.45%
7.25
FUTA
400.00
0.60%
2.40
SUTA
400.00
2.90%
11.60
b)
Tax
September Earnings Subject to Tax
Tax Rate
Tax Amount
FICASocial Security
$2,300.00
6.20%
$142.60
FICAMedicare
2,300.00
1.45%
33.35
FUTA
0
SUTA
0
c)
Tax
September Earnings Subject to Tax
Tax Rate
Tax Amount
FICASocial Security
FICAMedicare
FUTA
0
SUTA
0
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