Employer records the salary expenses for all employees’ gross pay
Employer records the salary expenses for all employees’ gross pay. Assume that the total salary expenses for ABC company’s employees are $15,500 for the month of September 2017. It consists of: FICA Social Security taxes (6.2% of up to $118,500 of an employee’s earnings): $2,170 FICA Medicare/Medicaid Taxes (1.45% of earnings): $530 Federal Income Taxes Withheld: $4,100 State Income Taxes Withheld: $300 Voluntary deductions( i.e., insurance prem, 401k, union dues…) $200 Net pay (paycheck) ? The employer ABC company is subject to the payroll taxes as follows: FICA Social Security taxes – matching employee’s portion FICA Medicare/Medicaid Taxes – matching employee’s portion Federal Unemployment Tax – 0.8% of first $7,000 of an employee’s earnings (No employee reached $7,000 of earnings yet.) State Unemployment Tax – 3% (rate varies in real world). Employer ABC expects to send out the withheld amounts to various governments and others by Oct 15. Questions: 1. How much was the net pay in Sept 30 2017 salary expense (=payroll expense)?