1. Chapter 14 14-2 Employer Payroll Taxes

2. Federal Income Tax Social Security Tax Medicare Tax Social Security Tax Medicare Tax Federal Unemployment Tax State Unemployment Tax ees ers Both Employees and Employers pay Social Security and Medicare Taxes.

3. Based on Employee Total Earnings Social Security Tax – 6.5% Medicare Tax – 1.5% Federal Unemployment Tax – 0.8% of first $7,000 State Unemployment Tax – 5.4% of first 7,000 ers

4. Accumulated Earnings as of Nov. 30 Total Earnings for Dec. 15 Pay Period Unemployment Taxable Earnings for Dec. 15 Rochelle $2,200100 (hasn’t reached 7,000) Grace 86003200 (reached 7,000) James 695050050 (need 50 to reach 7,000) Unemployment Taxable Earnings = first $7,000 an employee earns. Unemployment Taxes are only calculated on the first $7,000 earned.

6. Summary Employer taxes are based on Employee earnings Employer does not pay Income Tax Employer pays the same amount of Social Security and Medicare Tax that the Employee pays In addition, the Employer pays Unemployment Taxes, Federal and State – These taxes are calculated on the 1 st $7,000 that an Employee earns.