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Sky Company employed Tom Mills in Year 1. Tom earned $5,400 per month and worked the entire year. Assume the Social Security tax rate
Sky Company employed Tom Mills in Year 1. Tom earned $5,400 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. Tom's federal income tax withholding amount is $880 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. Required a. Answer the following questions. (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December b. Assume that instead of $5,400 per month Tom earned $9,600 per month. Answer the following questions (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? 1? (3) What is the total payroll tax expense for Sky Company for January Year 12 February Year 1? March Year 1? December Year 1? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req A3 Req B1 Req B2 Req B3
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