the federal unemployment tax act (futa) specifies that an employer pay 6% unemployment tax on the first…

the federal unemployment tax act (futa) specifies that an employer pay 6% unemployment tax on the first $7000 of earned income per employee. if the employer pays into a state unemployment insurance program, they will receive a 5.4% credit. the after - credit futa tax rate is therefore 0.6%. if a business has 100 employees, who each earn more than $7000 per year in wages, what is the businesss yearly futa tax payment? futa tax payment = $? round to the nearest hundredth.

the federal unemployment tax act (futa) specifies that an employer pay 6% unemployment tax on the first $7000 of earned income per employee. if the employer pays into a state unemployment insurance program, they will receive a 5.4% credit. the after - credit futa tax rate is therefore 0.6%. if a business has 100 employees, who each earn more than $7000 per year in wages, what is the businesss yearly futa tax payment? futa tax payment = $? round to the nearest hundredth.

Answer

Explanation:

Step1: Determine taxable amount per employee

Each employee has $7000$ taxable income.

Step2: Calculate total taxable income

Total taxable income = $7000\times100 = 700000$.

Step3: Calculate tax payment

Tax payment = $700000\times0.006=$4200$.

Answer:

$4200$