A contractor has 12 employees with varying wages. The total quarterly payroll is $180,000. If Alabama unemployment tax rate is 2.7% on the first $8,000 per employee annually, what is the maximum quarterly unemployment tax liability?
Correct Answer
C) $2,592
Maximum annual taxable wages per employee = $8,000. For 12 employees = $96,000. Quarterly = $24,000. Tax = $24,000 × 2.7% = $648 per quarter × 4 = $2,592 annually, or $648 per quarter maximum.
Why This Is the Correct Answer
Maximum annual taxable wages per employee = $8,000. For 12 employees = $96,000. Quarterly = $24,000. Tax = $24,000 × 2.7% = $648 per quarter × 4 = $2,592 annually, or $648 per quarter maximum.
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