General accounting An employee earns $6,500 per month working for an employer. The FICAtax rate for Social Security is 6.2% and the FICA tax rate for Medicare is1.45%. The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee'spay. The employee has $222 in federal income taxes withheld. Theemployee has voluntary deductions for health insurance of $190 andcontributes $95 to a retirement plan each month.What is the amount of net pay for the employee for the month of January?a. $5,495.75b. $5,590.00c. $5,144.75d. $5,092.75e. $5,443.75

Step 1: Define Gross Pay vs. Net PayThe gross pay an employee receives is the amount of their hourly…

Answered: An employee earns $6,500 per month…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter7: Employee Earnings And Deductions

Section: Chapter Questions

Problem 5E: For tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000...

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For tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000 for the unemployment tax and that all earnings are taxable for Medicare. For the payroll register for the month of November for Shelby, Inc., determine the taxable earnings for each employee.
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