Multiple Choice
Which of the following is NOT an employer payroll tax?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following payroll taxes are paid solely by employers and have no employee-paid portion?
A
Medicare taxes
B
State income taxes
C
Social Security taxes
D
Federal Unemployment Tax Act (FUTA) taxes
Verified step by step guidance1
Understand the concept of payroll taxes: Payroll taxes are taxes imposed on employers and employees, typically calculated as a percentage of the wages paid to employees. Some payroll taxes are shared between employers and employees, while others are paid solely by employers.
Identify the types of payroll taxes listed in the problem: Medicare taxes, State income taxes, Social Security taxes, and Federal Unemployment Tax Act (FUTA) taxes.
Clarify the nature of each tax: Medicare taxes and Social Security taxes are shared between employers and employees, meaning both parties contribute to these taxes. State income taxes are paid by employees and withheld by employers from employee wages.
Explain the unique characteristic of FUTA taxes: FUTA taxes are paid solely by employers and are used to fund unemployment benefits for workers who lose their jobs. Employees do not contribute to FUTA taxes.
Conclude that FUTA taxes are the correct answer because they are the only payroll taxes listed that are paid entirely by employers without any employee-paid portion.
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