Find the employer’s FICA deduction for each of the following employees.Find the amounts of the FUTA taxes for the current pay period for each of the following employees.Decimals for categories SS-0.062, Medicare-0.0145, (FUTA-0.0006 -$7000Cap) Show workEmployeesYear-to-DateCurrent GrossSocial Security (0.062)Medicare(0.0145)Subject to FUTA(0.006)FUTAF. Todd$6959.28$1088.64 T. Stanley$7,882.51$827.44 **Section 9.2 Find Employer Payroll TAX**Employers are required to pay both federal and state unemployment taxes. The official 2018 FUTA rate is 6.0% of the first $7,000 of each employee’s gross earnings in each year.If the employer pays it on time each quarter before FUTA taxes are due, the employer can reduce the FUTA tax burden to 0.6%. This is because in all states except for “credit reduction states,” the Federal government allows a credit of 5.4% to offset what the employer pays in state unemployment taxes. This means the maximum FUTA liability for many businesses is $42 per employee ($7,000 * 0.6% = $42). It doesn’t matter what the state tax rate is – the federal tax credit is the same. However, the SUTA tax will vary depending on the state.We will assume that all employers have reduced their tax burden to 0.6% for FUTA.**Federal Unemployment Tax (FUTA) Summary****Important Facts**- Unemployment taxes are paid solely by the employer. They are not deducted from an employee’s pay.- The federal government does not pay any unemployment benefits.- Unemployment benefits come from State Unemployment Taxes (SUTA).- The employer will pay 0.6% of the first $7000 of each employee’s annual pay to FUTA.**Each FUT problem involves two steps:**1. **Finding how much of the current gross is subject to FUTA.** - Subtract the year-to-date from $7000. - If this amount is more than the gross, the entire gross is taxed. - If this amount is less than the gross, this is the amount taxed. - If the year-to-date is already more than $7000, then $0 is subject to FUTA and the FUTA itself is $0.2. **Finding how much the employer will pay in FUTA for that amount.** **Possibility A. The entire gross earnings are taxed.** - Jake Johnson has a year-to-date of $4789. His gross this pay period is $789. 7000 – 4789 = 2211 which is more than 789, so 789 is taxed. 789(0.006) = $4.73 FUTA **Possibility B. The employee

Federal Unemployment Taxes (FUTA) The threshold limit for the Federal Unemployment taxes (FUTA) is $ 7000 and any thing which going beyond this threshold limit then it was not subject to the Federal Unemployment taxes (FUTA) as well. Required Details Employees Year to Date Current Gross Social Security (0.062) Medicare (0.0145) Subject to FUTA (0.006) FUTA F. Todd $6959.28 $ 1088.64 $460.8 107.77 $ 40.72 0.24 T Stanley $7882.51 $827.44 $498.71 $116.63 0 0 Working Note Calculation of FUTA Taxes Employees Name = F Todd Year to Date Earnings = $ 6959.28 Threshold Limit = $ 7000 = $ 7000 - $ 6959.28 = $ 40.72 FUTA Taxes = $ 40.72 * 0.006 = 0.24 Employees Name = T Stanley Here FUTA Tax is not applicable because of the year to date earning are crossing the threshold limit of $ 7000. Hence there is no FUTA Tax which are applicable for this case as well. Calculation of Social Security and Medicare Taxes Calculation of Social Security and Medicare Taxes Employee Name : F Todd Particulars Amount ($) Amount ($) Year to date Earnings 6959.28 Current Gross Earnings 1088.64 Gross Earnings 8047.92 Exemption for Gross Earnings ($8047.92 * 92.35%) 7432.25 Calculations Social Security Tax ($ 7432.25 * 0.062) 460.80 Medicare Taxes ($7432.25 * 0.0145) 107.77 Total Taxes 568.57 Calculation of Social Security and Medicare Taxes Employee Name : T Stanley Particulars Amount ($) Amount ($) Year to date Earnings 7882.51 Current Gross Earnings 827.44 Gross Earnings 8709.95 Exemption for Gross Earnings ($8709.95 * 92.35%) 8043.64 Calculations Social Security Tax ($ 8043.64 * 0.062) 498.71 Medicare Taxes ($8043.64 * 0.0145) 116.63 Total Taxes 615.34