payroll_taxes_limits(Ch11)

payroll_taxes_limits(Ch11) - 390 Cr. SUTA Payable 54 Cr....

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Ch 11: payroll taxes - working with limits (pg 496, Warren 23e) Scenario 1 Scenario 1 Given Extension If payroll is paid on 31-Dec Wages owed to employees on 31-Dec 26,000 , the SS Tax limit has been reached with some employees, since Wages subject to we are late in the year. Same applies to FUTA and SUTA. SS Tax at 6.0% rate 18,000 x 1,080 That is the reason the earnings subject to Medicare are higher Medicare Tax 1.5% rate 26,000 x 390 then for earnings subject to SS, SUTA and FUTA. (SUTA) State Unempl. 5.4% rate 1,000 x 54 Dr. Payroll Taxes 1,532 (FUTA) Fed Unempl. 0.8% rate 1,000 x 8 Cr. Social Security Tax Payable 1,080 Cr. Medicate Tax Payable
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Unformatted text preview: 390 Cr. SUTA Payable 54 Cr. FUTA Payable 8 Scenario 2 Scenario 2 Given Extension If payroll is paid on 2-Jan Wages owed to employees on 2-Jan 26,000 , then no one has reached any of the limits, so all earnings Wages subject to are subject to all payroll taxes. SS Tax at 6.0% rate 26,000 x 1,560 Medicare Tax 1.5% rate 26,000 x 390 Dr. Payroll Taxes 3,562 Cr. Social Security Tax Payable 1,560 (SUTA) State Unempl. 5.4% rate 26,000 x 1,404 Cr. Medicate Tax Payable 390 (FUTA) Fed Unempl. 0.8% rate 26,000 x 208 Cr. SUTA Payable 1,404 Cr. FUTA Payable 208...
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This note was uploaded on 06/22/2009 for the course ACCOUNTING 1b taught by Professor Seyedin during the Winter '08 term at Foothill College.

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