In some states, employers may obtain reduced unemployment compensation rates by
making voluntary contributions to the state fund.
If an employee works in more than one state, the employer must pay a separate SUTA
tax to each of those states in which the employee earns wages.
NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime
rates as follows:
1) Carry the hourly rate and the overtime rate to 3 decimal places and then round off to
2 decimal places (round the hourly rate to 2 decimal places before multiplying by one
and one-half to determine the overtime rate).
2) If the third decimal place is 5 or more, round to the next higher cent.
3) If the third decimal place is less than 5, drop the third decimal place. Also, use the
minimum hourly wage of $7.25 in solving these problems and all that follow. Carla
Maloney is a waitress who regularly receives $80 each week in tips and works 40 hours
each week.
Under the Uniform Unclaimed Property Act, any unclaimed paychecks must be turned
over to the state after the next payday.
Form 940 must be mailed to the IRS by January 15.
Employment application forms are usually discarded when the applicant is hired.
The tax paid to the federal government for unemployment taxes is used for paying state
and federal administrative expenses of the unemployment program.
NOTE: In this chapter and in all succeeding work throughout the course, unless
instructed otherwise, use the following rates, ceiling, and maximum taxes.
For rounding rules refer to page 2-33.
*Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
self-employed.
What are the payment due dates of each of the monthly liabilities assuming all the
deposits were made on time, and the due date of the filing of
Form 941 (year 20–)?
An employer will use the payroll register to keep track of an employees accumulated
wages.
Since FUTA tax is paid only once a quarter, the FUTA tax expense is recorded only at
the time of payment.
Form 941 is used by employers to make their quarterly return of FICA taxes and
withheld income taxes.
The employers payroll tax expenses are recorded by all employers at the time these
taxes are actually paid.
Under the Federal Insurance Contributions Act, the Medicare portion of the tax is only
paid by the employer.
A retail shop may employ a full-time student at $5.00 per hour.
Employers may adopt the practice of recording an employees starting and stopping time
to the nearest quarter of an hour.
Currently, none of the states imposes an unemployment tax on employees.
If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather
than paper Forms W-2.
Noncash fringe benefits that are provided employees are treated as nontaxable income
and thus are excluded from federal income tax withholding.
NOTE: In the following problems, use the net FUTA tax rate of 0.6% on the first
$7,000 of taxable wages.
Sparks Companys SUTA rate for next year is 3.25% because its reserve ratio falls into
the states 10% to less than 12% category [(contributions benefits paid) : average payroll
= $414,867 : $3,521,790 = 11.78%]. If the next bracket (12% to less than 14%) would
give the company a
lower tax rate of 3.05%, what would be the least amount of the voluntary contribution
needed to qualify the company for the 3.05% SUTA tax rate?
On Form 940, even if the total FUTA tax is more than $500, there is no listing of
quarterly federal unemployment tax liabilities.