For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers. Example 5-8 1. The 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 = Total taxes 14,319.20 $15,612.80 2. 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 employee's earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this week's pay. The unemployment taxes that the company must pay for this week's pay would be $48. FUTA tax (both over $7,000) = $0.00 SUTA tax ($1,000 0.048) = $48.00 ($500 of each employee's pay is under the state taxable limit of $12,000) In September Manson Paint Corporation began operations in a state that requires new employers of one or more individuals to pay a state unemployment tax of 3.5% of the first $7,000 of wages paid each employee. An analysis of the company's payroll for the year shows total wages paid of $171,400. The salaries of the president and the vice president of the company were $20,000 and $15,300, respectively, for the four-month period, but there were no other employees who received wages in excess of $7,000 for the four months. Included in the total wages were $840 paid to a director who only attended director meetings during the year, $6,410 paid to the factory superintendent, and $1,830 in employee contributions to a cafeteria plan made on a pretax basis-for both federal and state. In addition to the total wages of $171,400, a payment of $2,350 was made to Andersen Accounting Company for an audit it performed on the company's books in December. Compute the following; round your answers to the nearest cent. a. Net FUTA tax b. SUTA tax Since the SUTA rates changes are made at the end of each year, the available 2020 rates were used for FUTA and SUTA. Note: For this textbook edition the rate 0.6% was used for the net FUTA tax rate for employers. Example 5-7 Shu Company located in Arkansas had FUTA taxable wages of $130,000 and SUTA taxable wages (on first $10,000) were $210,000 with a 0.9 percent SUTA tax rate. The total unemployment taxes that Shu Company is liable for are: FUTA tax - $130,000 0.6% = $ 780 SUTA tax - $210,000 0.9% Total unemployment taxes = 1,890 $2,670 Due to its experience rating, Ianelli, Inc., is required to pay unemployment taxes on its payroll as follows: 1. Under SUTA for Massachusetts on taxable payroll of $17,600, the contribution rate is 4%. 2. Under SUTA for New Hampshire on taxable payroll of $24,000, the contribution rate is 6.65%. 3. Under SUTA for Maine on taxable payroll of $80,800, the contribution rate is 2.9%. 4. Under FUTA, the taxable payroll is $106,500. Compute the following; round your answers to the nearest cent. a. SUTA taxes paid to Massachusetts b. SUTA taxes paid to New Hampshire c. SUTA taxes paid to Maine d. FUTA taxes paid $ Example 5-8 1. The 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 SUTA $255,700 x 0.056 = Total taxes $ 1,293.60 14,319.20 $15,612.80 2. 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 employee's earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this week's pay. The unemployment taxes that the company must pay for this week's pay would be $48. FUTA tax (both over $7,000) = $0.00 SUTA tax ($1,000 0.048) $48.00 ($500 of each employee's pay is under the state taxable limit of $12,000) Peyton Company's payroll for the year is $733,140. Of this amount, $470,260 is for wages paid in excess of $7,000 to each individual employee. The SUTA rate in Peyton 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 b. Net SUTA tax c. Total unemployment taxes Example 5-2 Robertson Company paid wages of $515,000 for the year. Included in the payments was $250,000 paid to hourly employees over the $7,000 limit for each employee. The only employees who were not paid hourly were the president and vice president who were paid $125,000 and $90,000, respectively. Included in the wages was a payment of $2,000 to a director who only attended director meetings. Since the FUTA wage limit is $7,000 per employee, Robertson Company would pay a FUTA tax on $62,000 [$515,000 - $250,000 $201,000 (president and vice president over the limit by $118,000 and $83,000, respectively) - $2,000 (director's pay)]. The partnership of Keenan and Kludlow paid the following wages during this year: M. Keenan (partner) S. Kludlow (partner) N. Perry (supervisor) T. Lee (factory worker) R. Rolf (factory worker) $93,500 83,000 57,000 31,800 28,100 D. Broch (factory worker) S. Ruiz (bookkeeper) C. Rudolph (maintenance) 6,600 26,200 5,200 In addition, the partnership owed $200 to Rudolph for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first $9,000 of each employee's earnings. Compute the following: Round your answers to the nearest cent. a. Net FUTA tax for the partnership for this year b. SUTA tax for this year $