Culver Co. employed Jen Sing in 2016. Jen earned $5,200 per month and worked the entire year. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent. Jen’s federal income tax withholding amount is $800 per month. Use 6.0 percent for the unemployment tax rate for the first $7,000 of earnings per employee.
a. Answer the following questions:
(1) What is Jen’s net pay per month?
(2) What amount does Jen pay monthly in FICA payroll taxes?
(3) What is the total payroll tax expense for Culver Co. for January 2016? February 2016?
March 2016? December 2016?
b. Assume that instead of $5,200 per month, Jen earned $10,000 per month. Answer the questions in Requirement a.