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15 January, 07:34

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $11,700. What is the amount of total unemployment taxes the employer must pay on this employee's wages

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  1. 15 January, 10:56
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    Answer: $420

    Explanation:

    GIVEN the following;

    FUTA rate = 0.6%

    SUTA rate = 5.4%

    Applying both taxes on the first $7,000 of employee's pay

    (0.006 * $7,000) + (0.054 * $7,000)

    $42 + $378 = $420

    FUTA is the Federal Unemployment tax rate paid by the employer on the first $7,000 paid to each employee as wages during the year. While SUTA is the State Unemployment tax.
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