Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer's payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)
A) $2,009.21
B) $1,131.31
C) $2,506.48
D) $420.00
E) $1,054.04
E) $1,054.04
Explanation: Payroll Taxes = FICA-SS Tax + FICA-Medicare Tax + FUTA Tax + SUTA Tax
Payroll Taxes = $513.861 + $120.182 + $42.003 + $378.004 = $1,054.04
1FICA—Social Security $8,288 * 0.062 = $513.86
2FICA—Medicare $8,288 * 0.0145 = $120.18
3FUTA $7,000 * 0.006 = $42.00
4SUTA $7,000 * 0.054 = $378.00
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