If an employee in your center earns $9,500 a year, how much federal unemployment tax must you pay for this employee?
A. $400.00
B. $76.00
C. $475.00
D. $56.00
D.
To determine the amount of federal unemployment tax you must pay for an employee earning $9,500 a year, you need to consider the federal unemployment tax rate.
The federal unemployment tax rate is usually 6% of the first $7,000 of each employee's income. However, there is a credit of 5.4% if you are paying state unemployment taxes, which reduces the federal unemployment tax rate to 0.6%.
To calculate the federal unemployment tax for this employee:
1. Multiply the first $7,000 of their income by the federal unemployment tax rate (0.006) to find the tax on the first $7,000.
- $7,000 x 0.006 = $42.00
2. Since the employee earns $9,500, you need to calculate the tax on the remaining $2,500 of their income.
- $2,500 x 0.006 = $15.00
3. Add the two tax amounts together.
- $42.00 + $15.00 = $57.00
Therefore, the correct answer is not provided in the options given. The closest answer is D. $56.00, but the correct amount of federal unemployment tax for this employee is $57.00.