Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Payroll and Payroll Taxes

Financial Accounting

9. Current Liabilities

Payroll and Payroll Taxes

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following are included in an employer's payroll tax expense?

Employee's portion of Social Security and Medicare taxes

Employee's federal income tax withholding

Employer's portion of Social Security and Medicare taxes

Employee's voluntary deductions (such as health insurance premiums)

Previous problemNext problem

Verified step by step guidance

Understand the concept of payroll tax expense: Payroll tax expense refers to the taxes that an employer is responsible for paying directly to the government, separate from the amounts withheld from employees' paychecks.

Identify the employer's obligations: Employers are required to pay their portion of Social Security and Medicare taxes, which are collectively known as FICA taxes. These are separate from the amounts withheld from employees' wages.

Clarify the employee's portion: The employee's portion of Social Security and Medicare taxes, federal income tax withholding, and voluntary deductions (such as health insurance premiums) are deducted from the employee's paycheck but are not part of the employer's payroll tax expense.

Focus on the employer's portion: The employer's portion of Social Security and Medicare taxes is calculated as a percentage of the employee's wages. For Social Security, the rate is typically 6.2%, and for Medicare, it is 1.45%. These amounts are matched by the employer and paid to the government.

Exclude other deductions: Employee's federal income tax withholding and voluntary deductions (e.g., health insurance premiums) are not considered part of the employer's payroll tax expense because they are amounts deducted from the employee's wages and do not represent a direct cost to the employer.