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Chapter 11: Q10RQ (page 604)

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

Accounting for warranty expense and warranty payable

The accounting records of Sculpted Ceramics included the following at January 1, 2018:

Estimated Warranty Payable

5,000 Beg. Bal

In the past, Sculpted’s warranty expense has been 9% of sales. During 2018, Sculpted made sales of \(113,000 and paid \)7,000 to satisfy warranty claims. Requirements

  1. Journalize Sculpted’s warranty expense and warranty payments during 2018. Explanations are not required.
  2. What balance of Estimated Warranty Payable will Sculpted report on its balance sheet at December 31, 2018?

List the required employee payroll withholding deductions, and provide the tax rate for each.

O’Conner guarantees its vacuums for four years. Prior experience indicates that warranty costs will be approximately 6%ofsales. Assume that O’Conner made sales totaling $200,000 during 2018. Record the warranty expense for the year.

Macintosh Company has monthly salaries of \(26,000. Assume Macintosh pays all the standard payroll taxes, no employees have reached the payroll tax limits, total income tax withheld is \)2,000, and the only payroll deductions are payroll taxes. Journalize the accrual of salaries expense, accrual of employer payroll taxes, and payment of employee and employer payroll taxes for Macintosh Company.

What are the two main controls for payroll? Provide an example of each.
See all solutions

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