Fandango Furniture Manufacturing, Inc., has 40 employees on the assembly line, each with gross earnings of $325 per week.
a. What are the total social security and Medicare taxes that should be withheld from the employees' paychecks each week?
Social security: $806
Medicare: $ 188.5
b. What is the employer's share of these taxes for the first quarter of the year for these employees?
Social security: $ ?
Medicare: $ ?
I had figured out the first have but not the second.
Fandango Furniture Manufacturing, Inc., has 40 employees on the assembly line, each with gross earnings of $325 per week.
a. What are the total social security and Medicare taxes that should be withheld from the employees' paychecks each week?
Social security: $806
Medicare: $ 188.5
b. What is the employer's share of these taxes for the first quarter of the year for these employees?
Social security: $ ?
Medicare: $ ?
I had figured out the first have but not the second.
The second part would be $24.86 for each of the 40 employees
To find the employer's share of the social security and Medicare taxes for the first quarter of the year, you first need to calculate the total amount of gross earnings for the employees.
The gross earnings per week per employee is given as $325. Since there are 40 employees on the assembly line, the total gross earnings for the week can be calculated as follows:
Total Gross Earnings per week = Gross Earnings per week per employee x Number of employees
= $325 x 40
= $13,000
Now, let's calculate the employer's share of the social security tax for the first quarter of the year. The social security tax rate for the employer is 6.2% of the employee's income, up to a certain wage base limit. For the year 2021, the wage base limit is $142,800.
Employer's Share of Social Security Tax = Total Gross Earnings for the quarter x Social Security Tax Rate for the employer
To calculate for the first quarter:
Total Gross Earnings for the quarter = Total Gross Earnings per week x Number of weeks in a quarter
= $13,000 x 13 (assuming 13 weeks in a quarter)
= $169,000
Employer's Share of Social Security Tax = $169,000 x 6.2%
= $10,478
Next, let's calculate the employer's share of the Medicare tax for the first quarter. The Medicare tax rate for the employer is 1.45% of the employee's income, with no wage base limit.
Employer's Share of Medicare Tax = Total Gross Earnings for the quarter x Medicare Tax Rate for the employer
Employer's Share of Medicare Tax = $169,000 x 1.45%
= $2,450.50
Therefore, the employer's share of social security tax for the first quarter is $10,478 and the employer's share of Medicare tax for the first quarter is $2,450.50.