For the current month\'s payroll, Atlanta Company employees have $8,000,000 in s
ID: 2342129 • Letter: F
Question
For the current month's payroll, Atlanta Company employees have $8,000,000 in salaries. $1,200,000 of this income is for employees' first $7,000 of income. The SUT rate is $3.0% and the FUT rate is 0.6%, both on employees' first $7,000 of income. $800,000 of the total salaries are for employees whose salaries exceed $118,500. None of the salaries are for employees with incomes exceeding $200,000. Income taxes withheld are $1,600,000. $500,000 was deducted from employees' pay for health insurance and other benefits. The current FICA tax is 7.65% on salaries up to $118,500 and 1.45% on incomes between $118,500 and $200,000.
Based on the foregoing, what is the total NET salary paid by Altanta, and the total employer's payroll tax expense for the month?
Explanation / Answer
1 Gross salary 8000000 Deductions: Income taxes withheld 1600000 Health insurance and other benefits 500000 FICA tax 562400 =(8000000-800000)*7.65%+(800000*1.45%) Total deductions 2662400 Net salary paid 5337600 2 FICA tax 562400 Calculated above SUTA tax 36000 =1200000*3% FUTA tax 7200 =1200000*0.6% Total employer's payroll tax expense 605600