Multiple Choice
Which of the following is considered a payroll cost for employers?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following is a type of federal payroll tax?
A
Federal Insurance Contributions Act (FICA) tax
B
State Unemployment Tax (SUTA)
C
Sales tax
D
Property tax
Verified step by step guidance1
Understand the context of the question: The problem is asking about federal payroll taxes, which are taxes imposed by the federal government on employers and employees to fund specific programs.
Review the options provided: Federal Insurance Contributions Act (FICA) tax, State Unemployment Tax (SUTA), Sales tax, and Property tax.
Clarify the nature of each tax: FICA tax is a federal payroll tax used to fund Social Security and Medicare programs. SUTA is a state-level tax, not federal. Sales tax is a consumption tax on goods and services, and property tax is a local tax on property ownership.
Identify the correct answer: Since the question specifies 'federal payroll tax,' focus on the tax that is both federal and related to payroll. FICA tax fits this description.
Conclude that the correct answer is FICA tax, as it is the only federal payroll tax listed among the options.
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