Question

the current futa tax rate is 0.6% and the suta tax rate is 5.4 both taxes are applied to the first 7000 of an employees pay assume that an employee earned total wages 10100 what is the amount of total unemployement taxes the employer must pay on this employees wages

Answer 1

The employer would pay a FUTA tax of $42 and a SUTA tax of up to $378, for a potential total of $420 on an employee's wages of $10,100, applying only to the first $7,000. However, the actual SUTA rate may vary by state.

Step-by-step explanation:

The current Federal Unemployment Tax Act (FUTA) tax rate is 0.6%, and the State Unemployment Tax Act (SUTA) tax rate is typically 5.4%, with both taxes applying to the first $7,000 of an employee's pay. If an employee has earned total wages of $10,100, the employer would pay FUTA tax of $42 (0.6% of $7,000) and possibly up to SUTA tax of $378 (5.4% of $7,000), depending on the state's tax rate which can differ from the standard rate. The total amount of unemployment taxes the employer pays could be $420, but the exact SUTA tax could vary if the state has a different rate.

These unemployment taxes fund the state's unemployment benefits, which are designed to assist workers who have become unemployed through no fault of their own. These benefits often cover up to one-third of the wage the worker previously earned, capped at a certain period, commonly 26 weeks.

Answer 2

The employer must pay a total of $420 in unemployment taxes for this employee's wages.

To calculate the total unemployment taxes (FUTA and SUTA) that the employer must pay for an employee who earned total wages of $10,100, we need to apply the FUTA and SUTA tax rates to the taxable wage base.

FUTA Tax Calculation:

FUTA tax rate: 0.6%

Taxable wage base: $7,000

FUTA tax = (FUTA rate × Taxable wage base)

FUTA tax = (0.006 × 7,000)

FUTA tax = 42

SUTA Tax Calculation:

SUTA tax rate: 5.4%

Taxable wage base: $7,000

SUTA tax = (SUTA rate × Taxable wage base)

SUTA tax = (0.054 × 7,000)

SUTA tax = 378

Total Unemployment Taxes:

To find the total unemployment taxes, add the FUTA and SUTA taxes.

Total Unemployment Taxes = FUTA tax + SUTA tax

Total Unemployment Taxes = 42 + 378

Total Unemployment Taxes = 420