In December, Smart Touch Learning had wages subject to OASDI of $22,880 (one employee went over the $117,000 limit). Wages subject to Medicare were $28,580. FUTA and SUTA were due on $4,000 of wages paid to a new employee.
Prepare the journal entry to record the employer’s payroll taxes.
The entry requires a debit to Payroll Tax Expense of $2,081. Credits were made to FICA-OASDI Taxes Payable, FICA-Medicare Taxes Payable, FUTA Payable, and SUTA Payable.
How is the payroll tax expense $2081?
FICA OASDI is 1419
FICA Medicare is 414
Federal Unemployment taxes payable 24
State unempl. taxes payable is 224
I know the numbers add up but how did they get the FICA OASDI, Fedeal and state unemployment taxes?
Here is the help
Any amounts withheld from employee paychecks must be matched by the employer. For each employee, the company must pay (out of its own pocket) 7.65% of employee earnings up to $110,100 per employee. When earnings exceed $110,100 for each employee, the employer must pay 1.45% for Medicare.
State & Federal Unemployment Compensation Taxes
6.2% of first $7,000 of employee earnings
Prepare the journal entry to record the employer’s payroll taxes.
The entry requires a debit to Payroll Tax Expense of $2,081. Credits were made to FICA-OASDI Taxes Payable, FICA-Medicare Taxes Payable, FUTA Payable, and SUTA Payable.
How is the payroll tax expense $2081?
FICA OASDI is 1419
FICA Medicare is 414
Federal Unemployment taxes payable 24
State unempl. taxes payable is 224
I know the numbers add up but how did they get the FICA OASDI, Fedeal and state unemployment taxes?
Here is the help
Any amounts withheld from employee paychecks must be matched by the employer. For each employee, the company must pay (out of its own pocket) 7.65% of employee earnings up to $110,100 per employee. When earnings exceed $110,100 for each employee, the employer must pay 1.45% for Medicare.
State & Federal Unemployment Compensation Taxes
6.2% of first $7,000 of employee earnings
