Woods Co. employed Brian Smith in 2013. Brian earned $5,400 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings and the Medicare tax rate is 1.5 percent. Brian's federal income tax withholding amount is $1,200 per month. Use 5.4 percent for the state unemployment tax rate and .8 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee.
Required:
a. Answer the following questions.
(1) What is Brian's net pay per month?
(2) What amount does Brian pay monthly in FICA payroll taxes?
(3) What is the total payroll tax expense for Woods Co. for January 2013? February 2013?
March 2013? December 2013?
b. Assume that instead of $5,400 per month Brian earned $9,800 per month. Answer the questions in Requirement a.