Question

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $11,700. What is the amount of total unemployment taxes the employer must pay on this employee's wages

Answer 1

Answer:

$420

Explanation:

(0.006 x 7,000 = 42)+ (0.054 x 7,000 = 378)

42 + 378 = $420

Answer 2

Answer: $420

Explanation:

GIVEN the following ;

FUTA rate = 0.6%

SUTA rate = 5.4%

Applying both taxes on the first $7,000 of employee's pay

(0.006 × $7,000) + (0.054 × $7,000)

$42 + $378 = $420

FUTA is the Federal Unemployment tax rate paid by the employer on the first $7,000 paid to each employee as wages during the year. While SUTA is the State Unemployment tax.