The following information is for employee Ella Dodd for the week ended March 15.
Total hours worked: 48
Rate: $15 per hour, with double time for all hours in excess of 40
Federal income tax withheld: $200
United Fund deduction: $50
Cumulative earnings prior to current week: $6,400
Tax rates:
Social security: 6% with no maximum earnings.
Medicare tax: 1.5% on all earnings.
State unemployment: 3.4% with no maximum earnings; on employer.
Federal unemployment: 0.8% with no maximum earnings; on employer.
Required:
a) Determine the (1) total earnings, (2) total deductions, and (3) cash paid.
b) Determine each of the employer's payroll taxes related to the earnings of Ella Dodd for the week ended March 15.

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nicof2010 nicof2010 · Answer 1 · 2020-06-04T04:32:59+02:00

Answer:

a. The total earnings is $840

The total deductions is $313

The cash paid is $527

b. The Social security and medicare taxes is $63

The State unemployment tax is $28.56

The Federal unemployment tax is $6.72

Explanation:

a. To calculate the (1) total earnings, (2) total deductions, and (3) cash paid we would have to calculate the following formula:

1. Total earnings=(15*40)+((48-40)*15*2)

Total earnings=$840

2. Total deductions=(Federal Tax+United fund deduction+Social security tax+Medicare tax)

Total deductions=$200+$50+($840*6%)+($840*1.5%)

Total deductions=$313

3. Cash paid=Total earnings-Total deductions

Cash paid=$840-$313

Cash paid=$527

b. The calculation of each of the employer's payroll taxes related to the earnings of Ella Dodd for the week ended March 15 would be the following:

Social security and medicare taxes=$840*(6%+1.5%)

Social security and medicare taxes=$63

State unemployment tax=$840*3.4%

State unemployment tax=$28.56

Federal unemployment tax=$840*0.8%

Federal unemployment tax=$6.72