Patrick Poplin is a factory worker at Ingram Inc earning $15.00 per hour. Patrick is eligible for ten paid holidays and three weeks vacation and is paid "time-and-a-half" for overtime. He is also eligible for a $700 bonus at the end of the year
Patrick's earnings so far this year are $7,000. Tax rates are as follows: Employee income tax 15% on all earnings FICA 8% on first $100,00 . of earnings FUTA 1% on first $8,00 . of earnings SUTA 4% on first $8,00 . of earnings Assuming Patrick worked 48 hours this week, calculate the total expense to Ingram Inc for this week's wages, payroll taxes and fringe benefits.
Wages: Total
Regular wages $15 x 48 hr. $720.00 .
Overtime premium $7.50 x 8 hr. 60.00 $780.00
Employer payroll tax *
FICA $780 x 8% 62.40
FUTA 500 x 1% 5.00
SUTA 500 x 4% 20.00
Fringe benefits **
Vacation $15 x 40 hours = 600 x 3 = 1,800/49 = 36.73
Holiday 10 days paid =($15 x 8 x 10)/49 = 24.49
Bonus $700 / 49 14.29
$942.91
* Patrick has already earned $7,500 . so no more than the first $500 of his wages this week are eligible for FUTA and SUTA taxes.
** Since Patrick has 3 weeks of vacation, he is earning his benefits over the 49 weeks he works.
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