Berkley's gross pay for the week is $780. Berkley's yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Berkley's pay year-to-date has not yet exceeded the $7,000 cap. How much is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments?
A)$110.10
B)$108.03
C)$59.67
D)$48.36

Question

Quizplus · Accepted Answer

The unemployment tax is calculated as 6.2% of Berkley's weekly gross pay of $780, but only up to the $7,000 cap. Since the cap has not been exceeded, the tax is 6.2% of $780, which is $48.36.

Berkley's Gross Pay for the Week Is $780