An appliance company has three installers. Larry ears $385 per week, Curly earns $440 per week, and Moe earns $555 per week. The company’s SUTA rate is 5.4%, and the FUTA rate is 6.0% minus the SUTA. As usual these taxes are paid on the first 7,000 of each employees earnings

Answer 1

To calculate the SUTA and FUTA taxes for each employee, we first need to find their annual earnings:

Larry: $385 * 52 weeks = $19,820
Curly: $440 * 52 weeks = $22,880
Moe: $555 * 52 weeks = $28,860

Next, we need to determine the amount of earnings subject to SUTA and FUTA taxes for each employee (up to $7,000):

Larry: $7,000
Curly: $7,000
Moe: $7,000

Now we can calculate the SUTA and FUTA taxes for each employee:

SUTA rate = 5.4%
FUTA rate = 6.0% - 5.4% = 0.6%

SUTA tax:
Larry: $7,000 * 5.4% = $378
Curly: $7,000 * 5.4% = $378
Moe: $7,000 * 5.4% = $378

FUTA tax:
Larry: $7,000 * 0.6% = $42
Curly: $7,000 * 0.6% = $42
Moe: $7,000 * 0.6% = $42

Therefore, the total SUTA and FUTA taxes for each employee are as follows:
Larry: $378 + $42 = $420
Curly: $378 + $42 = $420
Moe: $378 + $42 = $420

In summary, the company will need to pay $420 in SUTA and FUTA taxes for each of their three installers.