The Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay unemployment taxes of: FUTA $215,600 × 0.006 = $1,293.60 SUTA $255,700 × 0.056 = 14,319.20 Total taxes $15,612.80 Kresloff Company has only two e
Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers.
Example 5-8
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The Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay
unemployment taxes of:FUTA $215,600 × 0.006 = $1,293.60 SUTA $255,700 × 0.056 = 14,319.20 Total taxes $15,612.80 -
Kresloff Company has only two employees and is located in a state that has set an unemployment tax for the company of 4.8 percent on the first $12,000 of each employee’s earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this week’s pay. The unemployment taxes that the company must pay for this week’s pay would be $48.
FUTA tax (both over $7,000) = $0.00
SUTA tax ($1,000 × 0.048) = $48.00
($500 of each employee’s pay is under the state taxable limit of $12,000)
Peyton Company's payroll for the year is $730,110. Of this amount, $472,190 is for wages paid in excess of $7,000 to each individual employee. The SUTA rate in Peyton Company's state is 2.9% on the first $7,000 of each employee's earnings.
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Required:
Compute:
a. Net FUTA tax
b. Net SUTA tax
c. Total unemployment taxes
Round your answers to the nearest cent.
| a. Net FUTA tax | $fill in the blank 2 | |
| b. Net SUTA tax | fill in the blank 3 | |
| c. Total unemployment taxes | $fill in the blank 4 |
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