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

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Multiple Choice

Which of the following increases an employer’s payroll costs?

Employee federal income tax withholdings

Employer contributions to Social Security and Medicare taxes

Employee contributions to health insurance premiums

Employee voluntary deductions for retirement plans

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Verified step by step guidance

Understand the concept of payroll costs: Payroll costs refer to the expenses incurred by an employer to compensate employees, including wages, salaries, and additional costs such as taxes and benefits.

Identify the items listed in the problem: The options include employee federal income tax withholdings, employer contributions to Social Security and Medicare taxes, employee contributions to health insurance premiums, and employee voluntary deductions for retirement plans.

Clarify the distinction between employer and employee responsibilities: Employee federal income tax withholdings, health insurance premiums, and retirement plan deductions are amounts deducted from the employee's paycheck and do not directly increase the employer's payroll costs. These are employee obligations.

Focus on employer contributions: Employer contributions to Social Security and Medicare taxes are mandatory payments made by the employer, matching the amounts withheld from employees' paychecks. These contributions directly increase the employer's payroll costs.

Conclude that employer contributions to Social Security and Medicare taxes are the correct answer, as they represent an additional cost incurred by the employer beyond the employee's gross wages.