Since the SUTA rates changes are made at the end of each year, the available 2021 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 5-8

1. 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

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 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)

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 $161,000. The salaries of the president and the vice president of the company were $19,800 and $14,200, 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 $960 paid to a director who only attended director meetings during the year, $6,470 paid to the factory superintendent, and $1,810 in employee contributions to a cafeteria plan made on a pretax basisfor both federal and state.

In addition to the total wages of $161,000, a payment of $2,240 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	$fill in the blank 1
b. SUTA tax	$fill in the blank 2