Question - Employer records the salary expenses for all employees' gross pay.
Assume that the total salary expenses for ABC company's employees are $15,500 for the month of September 2017. It consists of:
- FICA Social Security taxes (6.2% of up to $118,500 of an employee's earnings): $2,170
- FICA Medicare/Medicaid Taxes (1.45% of earnings): $530
- Federal Income Taxes Withheld: $4,100
- State Income Taxes Withheld: $300
- Voluntary deductions( i.e., insurance prem, 401k, union dues...) $200
- Net pay (paycheck) ?
The employer ABC company is subject to the payroll taxes as follows:
- FICA Social Security taxes - matching employee's portion
- FICA Medicare/Medicaid Taxes - matching employee's portion
- Federal Unemployment Tax - 0.8% of first $7,000 of an employee's earnings (No employee reached $7,000 of earnings yet.)
- State Unemployment Tax - 3% (rate varies in real world).
Employer ABC expects to send out the withheld amounts to various governments and others by Oct 15.
Questions: How much was the net pay in Sept 30 2017 salary expense (=payroll expense)?