A Florida contractor's SUTA rate is 2.7% on the first $7,000 of wages per employee. With 8 employees each earning over $7,000 annually, what is the total SUTA liability?
Correct Answer
D) $1,512
SUTA = 8 employees × $7,000 × 2.7% = $1,512.
Why This Is the Correct Answer
The correct answer is A ($1,512) because SUTA (State Unemployment Tax Act) tax is calculated by multiplying the number of employees by the wage base limit, then by the tax rate. Since each employee earns over $7,000, the full wage base of $7,000 applies to all 8 employees. The calculation is: 8 employees × $7,000 wage base × 2.7% rate = $1,512 total SUTA liability.
Why the Other Options Are Wrong
Option B: $2,160
This answer ($2,160) appears to use an incorrect rate of approximately 3.86% instead of the given 2.7% rate.
Option C: $756
This answer ($1,890) appears to use an incorrect rate of 3.375% instead of the given 2.7% rate (8 × $7,000 × 3.375% = $1,890).
Memory Technique
Remember 'SUTA CAPS' - SUTA has a wage CAP per employee ($7,000), and you multiply: Employees × CAP × Rate = Total SUTA liability.
Reference Hint
Look up payroll tax calculations and SUTA requirements in the Business and Finance chapter of your contractor reference manual.
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