Howard Murphy is the owner of Stormy Banana Films in West Hollywood, California. Stormy Banana Films had 15 employees with total annual wages of $214,750 (no one exceeded the Medicare tax surcharge or Social Security cap). The FUTA rate for California in 2017 is 2.2 percent because it is a credit reduction state. Stormy Banana Films has a SUTA rate of 3.2 percent for 2017 with a wage base of $7,000.
Compute the following employer taxes.
What will be an ideal response?
Social Security tax $13,314.50
Medicare tax $3,113.88
FUTA tax $2,310.00 ($7,000 wage base * 2.2% FUTA rate *15 employees)
SUTA tax $3,360.00 ($7,000 wage base * 3.2% SUTA rate *15 employees)
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