Kipley Company is a small manufacturing firm located in Pittsburgh, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.
Below is the payroll register for unemployment taxes (FUTA and SUTA) for the pay of January 14.
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KIPLEY COMPANY, INC.
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Payroll Register
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Time
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Employee Name
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Marital Status
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Taxable Earnings
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Card No.
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Gross Earnings
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11
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Carson, F.
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S
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$700.00
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12
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Wilson, W.
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S
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897.04
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13
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Utley, H.
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M
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678.75
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21
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Fife, L.
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M
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877.1
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22
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Smith, L.
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S
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790
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31
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Fay, G.
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M
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539.15
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32
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Robey, G.
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M
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623.08
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33
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Schork, T.
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S
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773.08
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51
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Hardy, B.
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M
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666.11
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99
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Kipley, C.
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M
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1,000.00
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Compute the following: If required, round your answers to the nearest cent.
1. Net FUTA tax. Since this is the first pay period of the year, none of the employees are near the $7,000 ceiling; therefore, each employee's gross earnings is subject to the FUTA tax.
Net FUTA tax = $
2. SUTA tax. Since Kipley Company is a new employer, Pennsylvania has assigned the company a contribution rate of 3.6785% on the first $8,750 of each employee's earnings. Employees pay 0.07% on total gross pay.
SUTA tax = $
Employees SUTA tax = $