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Employee earnings records for Slaymaker Company reveal these gross earnings for four employees through the pay period of December 15.

J. Seligman $93,500 L. Marshall $115,100
R. Eby $113,600 T. Olson $140,000
For the pay period ending December 31, each employee’s gross earnings is $4,500. The FICA tax rate is 7.65% on gross earnings of $132,900.

Instructions

Compute the FICA withholdings that should be made for each employee for the December 31 pay period. (Show computations.)

Prepare payroll register and record payroll and payroll tax expense.

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michell96

Based on the information, it can be inferred that Olson must pay $11,054.25 as FICA Tax.

How to calculate the FICA withholding of each employee?

To calculate the FICA withholding of each employee it is necessary to add the $4,500 earned by the employees in the pay period of December 31:

  • $93,500 + $4,500 = $98,000
  • $113,600 + $4,500 = $118,100
  • $115,100 + $4,500 = $119,600
  • $140,000 + $4,500 = $144,500

Next, we need to calculate 7.65% of values over $132,900, meaning only Olson's income tax would apply.

To calculate 7.65% of Olson's gross profits it is calculated as shown below.

  • $144,500 ÷ 100 = $1,445

  • $1,445 × 7.65% = $11,054.25

Based on the above, the tax Olson must pay is $11,054.25

Learn more about taxes in: https://brainly.com/question/16423331

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