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- September 13, 2020
- By menge

*I need the net SUTA and Futa Tax at the END!!!—>*

*Note:* In this chapter and in all succeeding work throughout the course, * unless instructed otherwise*, calculate hourly rates and overtime rates as follows:

1. | Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate). | |

2. | If the third decimal place is 5 or more, round to the next higher cent. | |

3. | If the third decimal place is less than 5, simply drop the third decimal place. | |

Examples: |
Monthly rate $1,827 Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 × 1.5 = $15.81 |

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

*Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2015 rates were used for FUTA and SUTA.*

Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers.

**Example 5-2**

Assume that in 2016, an employer had charged the wages account for $79,850. Of this amount, $720 will not be paid until the first payday in 2017. Further, the wages actually paid to employees in 2016 in excess of $7,000 each amounted to $29,840. The gross FUTA tax imposed on the employer is computed as follows:

Total amount charged to wages during 2016 | $79,850.00 | |||

Less: | ||||

Wages not to be paid until 2017 | $720 | |||

Wages paid in excess of $7,000 limit | 29,840 | 30,560.00 | ||

Total taxable wages | $49,290.00 | |||

Rate of tax | × 6.0% | |||

Amount of gross FUTA tax | $2,957.40 |

In September 2016, Painter Wax Corporation began operations in a state that requires new employers of one or more individuals to pay a state unemployment tax of 4.1% of the first $7,000 of wages paid each employee.

An analysis of the company’s payroll for the year shows total wages paid of $212,640. The salaries of the president and the vice president of the company were $25,000 and $15,000, respectively, for the four-month period, but there were no other employees who received wages in excess of $7,000 for the four months. Included in the total wages were $900 paid to a director who only attended director meetings during the year, $6,300 paid to the factory superintendent, and $2,000 in employee contributions to a cafeteria plan made on a pretax basis-for both federal and state.

In addition to the total wages of $212,640, a payment of $2,000 was made to Andersen Accounting Company for an audit it performed on the company’s books in December 2016. Compute the following; round your answers to the nearest cent.

a. Net FUTA tax |
$ |

b. SUTA tax |
$ |