The payroll register of Quality Lawn Car showed total employee earnings of $2,800 for the payroll period ended June 14, 2010.

1. I need to compute the employer's payroll taxes for the period. Use rates of 6.2 percent for the employer's share of the social security tax, 1.45 percent for Medicare tax, 0.8 percent for FUTA tax, and 5.4 percent for SUTA tax. All earnings are taxable.

2. Prepare a general journal entry to record the employer's payroll taxes for the period.

Analyze: Which of the above taxes are paid by the employee and matched by the employer?

Fica tax 173.60
Medicare tax 40.60
Futa Tax 22.40
Suta tax 151.20
________
total Employer tax 387.80

You pay 3 days after payroll the fica and Medicare taxes and you will remit the employer share that you deduted from the employee.

Fica 173.60 x 2 = 346.40
Medicare 40.60 x 2= 81.20
-------
Total deposit due 427.60

When the payroll posts it will post the gross wages than the taxes to the payables account.

when you go to pay the taxes you will credit cash and debit the tax payable account.

Cash Credit 427.60
Debit fica account 346.40
Debit Medicare tax 81.20


The Suta and Futa accounts are state and federal unemployment accounts. When payroll is run the amounts are posted to the Suta and Futa payable accounts. These are paid on a quarterly basis.

Credit cash amount of quarterly tax
Debit suta or futa account

Shirley