Question
Sky Co. employed Tom Mills in 2016. Tom earned $5,000 per month and worked the entire year. Assume the Social Security tax rate is 6
Sky Co. employed Tom Mills in 2016. Tom earned $5,000 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings and the Medicare tax rate is 1.5 percent. Toms federal income tax withholding amount is $890 per month. Use 5.4 percent for the state unemployment tax rate and .6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee. |
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a. | Answer the following questions. (Round your answers to 2 decimal places.) |
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1. | What is Toms net pay per month? |
2. | What amount does Tom pay monthly in FICA payroll taxes? |
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3. | What is the total payroll tax expense for Sky Co. for January 2016? February 2016? March 2016? December 2016? |
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b. | Assume that instead of $5,000 per month Tom earned $9,600 per month. Answer the following questions. (Round your answers to 2 decimal places.) |
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| 1. | What is Toms net pay? | ||||||||
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2. | What amount does Tom pay monthly in FICA payroll taxes? |
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3. | What is the total payroll tax expense for Sky Co. for January 2016? February 2016? March 2016? December 2016? |
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