Example 5-8

Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay unemployment taxes of:

FUTA $215,600 0.006	=	$1,293.60
SUTA $255,700 0.056	=	14,319.20
Total taxes		$15,612.80

Kresloff Company has only two employees and is located in a state that has set an unemployment tax for the company of 4.8 percent on the first $12,000 of each employees earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this weeks pay. The unemployment taxes that the company must pay for this weeks pay would be $48. FUTA tax (both over $7,000) = $0.00 SUTA tax ($1,000 0.048) = $48.00 ($500 of each employees pay is under the state taxable limit of $12,000)

Qwan Company's payroll for the year is $737,910. Of this amount, $472,120 is for wages paid in excess of $7,000 to each individual employee. The SUTA rate in Qwan Company's state is 2.9% on the first $7,000 of each employee's earnings. Compute:

Round your answers to the nearest cent.

a. Net FUTA tax	$fill in the blank 1
b. Net SUTA tax	fill in the blank 2
c. Total unemployment taxes	$fill in the blank 3