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What payroll taxes is the employer responsible for paying?

Short Answer

Expert verified

An employer is responsible for paying FICA, SUTA, and FUTA payroll taxes.

Step by step solution

01

Employer payroll taxes

Employer payroll taxes are the taxes that are paid by the employer and are not withheld from the employees’ gross earnings.

An employer is liable to pay at least three payroll taxes –

02

Payroll taxes to be paid by the employer

An employer is liable to pay at least the following three taxes –

a) Employer FICA Tax: It is the tax that is paid from the employer’s side regarding OASDI and Medicare.

b) State Unemployment and Compensation Tax (SUTA): This is the tax that is imposed to compensate workers that are laid off from their work. These are paid by the employer and not deducted from the employee’s gross earnings.

c) Federal Unemployment Compensation Tax (FUTA): This tax is similar to SUTA but this is levied by the federal government, unlike SUTA which is levied by the state government.

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Most popular questions from this chapter

Lucy Rose works at College of Fort Worth and is paid $12 per hour for a 40-hour workweek and time-and-a-half for hours above 40.

Requirements

1. Compute Rose’s gross pay for working 60 hours during the first week of February.

2. Rose is single, and her income tax withholding is 15% of total pay. Rose’s only payroll deductions are payroll taxes. Compute Rose’s net (take-home) pay for the week. Assume Rose’s earnings to date are less than the OASDI limit.

3. Journalize the accrual of wages expense and the payment related to the employment of Lucy Rose.

Curtis Company is facing a potential lawsuit. Curtis’s lawyers think that it is reasonably possible that it will lose the lawsuit. How should Curtis report this lawsuit?

Samuel Industries has three employees. Each employee earns two vacation days a month. Samuel pays each employee a weekly salary of $1,250 for a five-day workweek. Requirements

1. Determine the amount of vacation expense for one month.

2. Journalize the entry to accrue the vacation expense for the month.

Question: Recording employee and employer payroll taxes County Company had the following partially completed payroll register:

EarningsWithholdings

Beginning Cumulative Earnings

Current Period Earnings

Ending Cumulative Earnings

OASDI

Medicare

Income

tax

Health

Insurance

United

way

Total

Withholding

Net

pay

Check

No.

Salaries and Wages Expense

\( 77,000

\) 4,500

\( 900

\) 90

\(15

801

112,000

7,200

1,200

144

35

802

48,000

3,300

600

66

0

803

61,000

3,300

850

66

20

804

0

4,500

1,100

90

0

805

\)298,000

\(22,800

\)4,650

\(456

\)70

Requirements

  1. Complete the payroll register. Round to two decimals.
  2. Journalize County Company’s salaries and wages expense accrual for the current pay period.
  3. Journalize County Company’s expenses for employer payroll taxes for the current pay period.
  4. Journalize the payment to employees.
  5. Journalize the payment for withholdings and employer payroll taxes.

On January 1, Irving Company purchased equipment of \(280,000 with a long-term note payable. The debt is payable in annual installments of \)56,000 due on December 31 of each year. At the date of purchase, how will Irving Company report the note payable?

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