Given the following information, determine the burdened monthly wage rate for a project manager. Assume the project manager takes full advantage of the retirement benefit.

Question

Wage rate—$11,000 per month
Gas allowance—$200 per month
Annual bonus—$5,000
Social Security—6.2 percent on the first $127,200 of wages
Medicare—1.45 percent of all wages
FUTA—0.6 percent on the first $7,000 of wages
SUTA—3.1 percent on the first $18,000 of wages
Worker’s compensation insurance—$6.60 per $100.00 of wages
General liability insurance—0.8 percent of wages
Health insurance (company’s portion)—$400 per month per employee
Retirement—$0.50 per $1.00 contributed by the employee on 6 percent of the employee’s wages

Answer 1

Determine the wages and burden as follows:



Wages = $11,000/mo × 12 mo + $200/mo × 12 mo + $5,000 = $139,400



Social Security is only paid on the first $127,200 of wages.



Social Security = $127,200 × 0.062 = $7,886



Medicare = $139,400 × 0.0145 = $2,021



FUTA = $7,000 × 0.006 = $42



SUTA = $18,000 × 0.031 = $558



Workers’ comp. insurance = $139,400 ($6.60/$100) = $9,200



General liability insurance = $139,400 × 0.008 = $1,115



Health insurance = $400/month × 12 months = $4,800



The company contributes up to 3.0 percent (50 percent of 6 percent) of the employee’s wages to the employee’s retirement account.



Retirement = $139,400 × 0.03 = $4,182



Benefits = $7,886 + $2,021 + $42 + $558 + $9,200 + $1,115 + $4,800 + $4,182 = $29,804



$7,049 + $1,673 + $42 + $558 + 7,616 + $923 + $4,800 + $3,462 = $26,123