Question

The payroll of Grouper Company for September 2019 is as follows. Total payroll was $446,000, of which $106,000 is exempt from Social Security tax because it represented amounts paid in excess of $128,400 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment tax) was $400,000. Income taxes in the amount of $78,700 were withheld, as was $8,900 in union dues. The state unemployment tax is 3.5%, but Grouper Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $128,400 and 1.45% in excess of $128,400. No employee for Grouper makes more than $135,000. The federal unemployment tax rate is 0.8% after state credit. answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

The total amount of payroll taxes for Grouper Company in September 2019 is $27,687.

Step-by-step explanation:

The payroll taxes for Grouper Company in September 2019 can be calculated as follows:

1. First, the amount of wages subject to Social Security tax needs to be determined. The maximum wage subject to Social Security tax is $128,400, and any wages above this amount are exempt. In this case, $106,000 is exempt, so the amount of wages subject to Social Security tax is $446,000 - $106,000 = $340,000.
2. Next, calculate the Social Security tax. The employee and employer each contribute 6.2% of the wages subject to Social Security tax, so the total Social Security tax is 6.2% x $340,000 = $21,080.
3. Then, calculate the Medicare tax. The employee and employer each contribute 1.45% of the total wages, so the total Medicare tax is 1.45% x $446,000 = $6,467.
4. Next, calculate the federal unemployment tax. The rate is 0.8% after state credit, so the federal unemployment tax is 0.8% x $7,000 = $56.
5. Finally, calculate the state unemployment tax. The rate is 3.5%, but Grouper Company is allowed a credit of 2.3% by the state for its unemployment experience. So, the state unemployment tax is 3.5% - 2.3% = 1.2% x $7,000 = $84.

Therefore, the total amount of payroll taxes for Grouper Company in September 2019 is $21,080 + $6,467 + $56 + $84 = $27,687.

Answer 2

The payroll of Grouper Company for September 2019 included exemptions, income taxes withheld, union dues, and various tax rates and credits for Social Security and unemployment taxes.

The payroll for Grouper Company in September 2019 was $446,000. However, $106,000 of this amount is exempt from Social Security tax because it exceeded the maximum limit of $128,400 for certain employees.

Payments to employees in excess of $7,000, which is the maximum for both federal and state unemployment tax, totaled $400,000.

Income taxes withheld amounted to $78,700, while $8,900 was deducted as union dues.

The state unemployment tax rate is 3.5%, but Grouper Company receives a credit of 2.3% for its unemployment experience.

The current FICA tax is 7.65% on wages up to $128,400, and 1.45% on wages exceeding that amount, with no employee at Grouper making more than $135,000. The federal unemployment tax rate is 0.8% after state credit.