Score Skateboard Company is a small firm that designs and manufactures skateboards for high school and college students who want effective, fast transportation around campus. Score has two employees who receive $1,100 gross pay per semimonthly pay period and four employees who receive $850 gross pay per semimonthly pay period. The company owner and manager, Christie, needs to determine how much to include in her budget for each employee. Starting in January, Score will be contributing $75 per pay period to each employee's retirement fund. Score is in a state that has a maximum of $7,000 gross pay for SUTA and Score is required to pay 5.4% of the first $7,000 for each employee.
Calculate the cost to Score an employee with $1,100 gross pay in the first period in January.
2. Calculate the cost to Score for an employee with $850 gross pay in the first period in January.
3. Find the total gross semimonthly pay for all six employees and compare this to the total amount Score must include in its budget. How much extra is needed in the budget?
4. Calculate the total amount Score will need for it first quarter FUTA and SUTA deposit. There are six semimonthly pay periods in the first quarter of the year.
Let's summarize the situation.
Company: Score
Total number of employees: 6
Pay period: semi-monthly.
Salary break down:
2 employees at $1100 per pay
4 employees at $850 per pay
Proposed employee retirement fund:
$75 per pay per employee
SUTA contribution (extra expense for Score):
5.4% for first $7000 gross pay
This means that all employees will contribute 5.4% for the first 6 pays if the salary is below 7000/6=$1167, or in the case of Score, all employees.
Calculations:
1. Each employee with $1100 gross salary.
Gross salary = $1100
Retirement fund = $75
SUTA contribution = $1100*0.054=$59.40
Total per employee = $1234.40
2. Each employee with $850 gross salary
Gross Salary = $850
Retirement fund = $75
SUTA contribution = $850*0.054 = $45.9
Total per employee = $850+75+45.9=$970.90
3.
Total gross pay = 2*1100+4*850 = $5600
Total cost to Score = 2*1234.4+4*970.90 = $6352.40
There is a difference of 752.40 in contributions and retirement funds, or 13.4% more.
4. total budget required for first quarter (6 pays)
= 6*6352.40
= $38,114.40
To calculate the cost to Score for each employee, we need to consider the following components: gross pay, retirement fund contribution, SUTA (State Unemployment Tax Act), and FUTA (Federal Unemployment Tax Act) deposits.
1. Cost for an employee with $1,100 gross pay:
- Gross pay: $1,100
- Retirement fund contribution: $75
- SUTA deposit: 5.4% of the first $7,000 (assuming the employee does not exceed this maximum)
Therefore, the cost to Score for an employee with $1,100 gross pay in the first period of January would be:
$1,100 + $75 + (5.4% * $7,000) = $1,100 + $75 + $378 = $1,553
2. Cost for an employee with $850 gross pay:
- Gross pay: $850
- Retirement fund contribution: $75
- SUTA deposit: 5.4% of the first $7,000 (assuming the employee does not exceed this maximum)
Therefore, the cost to Score for an employee with $850 gross pay in the first period of January would be:
$850 + $75 + (5.4% * $7,000) = $850 + $75 + $378 = $1,303
3. Total gross semimonthly pay for all six employees and extra budget needed:
- For the two employees with $1,100 gross pay:
$1,100 x 2 = $2,200
- For the four employees with $850 gross pay:
$850 x 4 = $3,400
Total gross semimonthly pay for all six employees:
$2,200 + $3,400 = $5,600
Total amount Score must include in its budget:
$1,553 + $1,303 = $2,856
Extra budget needed:
$5,600 - $2,856 = $2,744
4. Total amount Score will need for its first quarter FUTA and SUTA deposit:
Since there are six semimonthly pay periods in the first quarter, we need to consider the FUTA and SUTA deposits for all employees.
- FUTA deposit: 6% of the first $7,000 (assuming none of the employees exceed this maximum)
- SUTA deposit: 5.4% of the first $7,000 for each employee
Total FUTA deposit:
6% * 6 * $7,000 = $2,520
Total SUTA deposit:
5.4% * 6 * $7,000 = $13,608
Total amount Score will need for its first quarter FUTA and SUTA deposit:
$2,520 + $13,608 = $16,128
Please note that these calculations are based on the given information and assumptions provided.
To calculate the cost to Score for an employee with $1,100 gross pay in the first period in January, we need to consider the following components:
1. Gross Pay: The gross pay for this employee is $1,100 per semimonthly pay period.
2. Retirement Fund Contribution: Starting in January, Score will contribute $75 per pay period to each employee's retirement fund.
3. FUTA (Federal Unemployment Tax Act) and SUTA (State Unemployment Tax Act) Taxes: FUTA and SUTA are payroll taxes that employers are responsible for paying. In this case, we need to calculate the SUTA tax as per the state's requirements.
To calculate the cost, we need to add the gross pay, retirement fund contribution, and SUTA tax. Let's break down the calculation:
1. Gross Pay: $1,100
2. Retirement Fund Contribution per pay period: $75
3. SUTA Tax: 5.4% of the first $7,000 for each employee
1. Calculate the cost for an employee with $1,100 gross pay in the first period in January:
Gross Pay: $1,100
Retirement Fund Contribution: $75
SUTA Tax: 5.4% of $7,000 (maximum gross pay for SUTA)
SUTA Tax = 5.4% * $7,000 = $378
Total Cost = Gross Pay + Retirement Fund Contribution + SUTA Tax
Total Cost = $1,100 + $75 + $378 = $1,553
Therefore, the cost to Score for an employee with $1,100 gross pay in the first period in January is $1,553.
To calculate the cost to Score for an employee with $850 gross pay in the first period in January, we follow the same process:
Gross Pay: $850
Retirement Fund Contribution: $75
SUTA Tax: 5.4% of $7,000 (maximum gross pay for SUTA)
SUTA Tax = 5.4% * $7,000 = $378
Total Cost = Gross Pay + Retirement Fund Contribution + SUTA Tax
Total Cost = $850 + $75 + $378 = $1,303
Therefore, the cost to Score for an employee with $850 gross pay in the first period in January is $1,303.
To find the total gross semimonthly pay for all six employees and compare it to the total amount Score must include in its budget, we add up the gross pay for each employee:
For two employees receiving $1,100 gross pay per semimonthly pay period:
Total Gross Pay = 2 * $1,100 = $2,200
For four employees receiving $850 gross pay per semimonthly pay period:
Total Gross Pay = 4 * $850 = $3,400
Total Gross Semimonthly Pay = $2,200 + $3,400 = $5,600
Next, we need to calculate the retirement fund contribution and SUTA tax contributions for all six employees.
Retirement Fund Contribution:
Retirement Fund Contribution per pay period: $75
Total Retirement Fund Contribution = 6 * $75 = $450
SUTA Tax:
SUTA Tax rate = 5.4%
SUTA Taxable Wage Base = $7,000 (maximum gross pay for SUTA)
SUTA Tax per pay period = SUTA Tax rate * SUTA Taxable Wage Base = 5.4% * $7,000 = $378
Total SUTA Tax Contribution = 6 * $378 = $2,268
Total Budget Amount = Total Gross Semimonthly Pay + Total Retirement Fund Contribution + Total SUTA Tax Contribution
Total Budget Amount = $5,600 + $450 + $2,268 = $8,318
Therefore, Score needs to include $8,318 in its budget.
To calculate the total amount Score will need for its first-quarter FUTA and SUTA deposit, we need to consider the following:
First quarter of the year consists of six semimonthly pay periods.
FUTA Tax:
FUTA Tax rate = 0.6%
FUTA Taxable Wage Base = $7,000 (maximum gross pay for FUTA)
FUTA Tax per pay period = FUTA Tax rate * FUTA Taxable Wage Base = 0.6% * $7,000 = $42
Total FUTA Tax Contribution for the first quarter = FUTA Tax per pay period * Number of pay periods = $42 * 6 = $252
SUTA Tax:
SUTA Tax rate = 5.4%
SUTA Taxable Wage Base = $7,000 (maximum gross pay for SUTA)
SUTA Tax per pay period = SUTA Tax rate * SUTA Taxable Wage Base = 5.4% * $7,000 = $378
Total SUTA Tax Contribution for the first quarter = SUTA Tax per pay period * Number of pay periods = $378 * 6 = $2,268
Total FUTA and SUTA Tax Contribution for the first quarter = Total FUTA Tax Contribution + Total SUTA Tax Contribution
Total FUTA and SUTA Tax Contribution = $252 + $2,268 = $2,520
Therefore, Score will need $2,520 for its first-quarter FUTA and SUTA deposit.