Universal Exporting has three warehouse employees: John Abner earns $422 per week, Anne Clark earns $510 per week, and Todd Corbin earns $695 per week. The company’s SUTA tax rate is 5.4%, and the FUTA rate is 6.2% minus the SUTA. As usual, these taxes are paid on the first $7,000 of each employee’s earnings. How much FUTA tax did the company pay on these employees in the first quarter of the year? (Points : 3)
7000 divided by 4 egal 1750
Katie Jergens works for Dynamic Designs selling clothing. She is on a salary of $140 per week plus a commission
of 7% of her sales. Last week she sold 19 dresses at $79.95 each, 26 skirts at $24.75 each, and 17 jackets at
$51.50 each. What were her total gross earnings for the week?
To calculate the FUTA tax paid on these employees in the first quarter of the year, we need to determine the taxable earnings for each employee and then apply the FUTA tax rate.
Step 1: Calculate the taxable earnings for each employee:
- John Abner's taxable earnings = $422 (per week) x 13 (weeks in the first quarter) = $5,486
- Anne Clark's taxable earnings = $510 (per week) x 13 (weeks in the first quarter) = $6,630
- Todd Corbin's taxable earnings = $695 (per week) x 13 (weeks in the first quarter) = $9,035
Step 2: Calculate the FUTA tax rate:
- FUTA rate = 6.2% - 5.4% = 0.8% (since the SUTA rate is subtracted from the FUTA rate)
Step 3: Calculate the FUTA tax paid for each employee:
- FUTA tax paid for John Abner = $5,486 (taxable earnings) x 0.008 (FUTA rate) = $43.89
- FUTA tax paid for Anne Clark = $6,630 (taxable earnings) x 0.008 (FUTA rate) = $53.04
- FUTA tax paid for Todd Corbin = $7,000 (maximum taxable limit) x 0.008 (FUTA rate) = $56.00
Step 4: Calculate the total FUTA tax paid for all employees:
- Total FUTA tax paid = FUTA tax paid for each employee added together
= $43.89 + $53.04 + $56.00
= $152.93
Therefore, the company paid $152.93 in FUTA tax on these employees in the first quarter of the year.
To calculate the FUTA tax paid by the company on these employees in the first quarter of the year, we need to follow these steps:
1. Calculate the SUTA tax for each employee.
- SUTA tax rate: 5.4%
- Maximum earnings subject to SUTA tax: $7,000
John Abner's SUTA tax: $422 * 5.4% = $22.81
Anne Clark's SUTA tax: $510 * 5.4% = $27.54
Todd Corbin's SUTA tax: $695 * 5.4% = $37.53
2. Calculate the FUTA tax rate.
- FUTA tax rate: 6.2% - SUTA tax rate
FUTA tax rate = 6.2% - 5.4% = 0.8% (or 0.008 in decimal form)
3. Calculate the FUTA tax for each employee.
John Abner's FUTA tax: $7,000 * 0.008 = $56
Anne Clark's FUTA tax: $7,000 * 0.008 = $56
Todd Corbin's FUTA tax: $7,000 * 0.008 = $56
4. Calculate the total FUTA tax paid by the company.
Total FUTA tax = John Abner's FUTA tax + Anne Clark's FUTA tax + Todd Corbin's FUTA tax
= $56 + $56 + $56
= $168
Therefore, the company paid $168 in FUTA tax on these employees in the first quarter of the year.