Olney Company is a small manufacturing firm located in Allentown, 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.
Wages are paid every Friday, with one week's pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).
Below is the payroll register for unemployment taxes (FUTA and SUTA) for the pay of January 14.
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OLNEY COMPANY, INC.
Payroll Register
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|
Time
Card No.
|
Employee Name
|
Marital Status
|
Gross Earnings
|
|
|
11
|
Mangino, R.
|
S
|
$740.00
|
|
|
|
12
|
Flores, I.
|
S
|
1,058.80
|
|
|
|
13
|
Palmetto, C.
|
M
|
685.30
|
|
|
|
21
|
Waters, R.
|
M
|
1,045.35
|
|
|
|
22
|
Kroll, C.
|
S
|
952.00
|
|
|
|
31
|
Ruppert, C.
|
M
|
839.00
|
|
|
|
32
|
Scott, W.
|
M
|
780.00
|
|
|
|
33
|
Wickman, S.
|
S
|
807.69
|
|
|
|
51
|
Foley, L.
|
M
|
1,233.16
|
|
|
|
99
|
Olney, M.
|
M
|
1,500.00
|
|
|
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 Olney Company is a new employer, Pennsylvania has assigned the company a contribution rate of 3.6785% on the first $8,500 of each employee's earnings. Employees pay 0.07% on total gross pay.
SUTA tax = $
Employees SUTA tax rate = $