Sky Company employed Tom Mills in Year 1. Tom earned $6,000 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $130,000 of earnings, and the Medicare tax rate is 1.5 percent. Toms federal income tax withholding amount is $870 per month. Use 5.4 percent for the state unemployment tax rate and 0.6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee.

What is the total payroll tax expense for Sky Company for January, Year 1? February, Year 1? March, Year 1? December, Year 1?

Total Employer Payroll Tax
January	---------
February	---------
March	---------
December	---------

Assume that instead of $6,000 per month Tom earned $11,400 per month. Based on this new level of income Toms new federal income tax withholding is $2,000. Answer the following questions.

What is Toms net pay per month?

What amount does Tom pay monthly in FICA payroll taxes?

What is the total payroll tax expense for Sky Company for January, Year 1? February, Year 1? March, Year 1? December, Year 1?

Net Pay
January to November (per month)
December

FICA Payroll Tax
January to November (per month)
December

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	Total Employer Payroll Tax
January
February
March
December