What is the taxable wage amount for each employee during a calendar year?

What is the taxable wage amount for each employee during a calendar year?

• A. $5000
• B. $7000
• C. $9000
• D. $10000

Answer: (B)

The correct taxable wage amount for each employee during a calendar year is $7,000. In South Carolina, this figure aligns with the Federal Unemployment Tax (FUTA) threshold, which states that the first $7,000 of each employee's wages is subject to unemployment tax. This means that any wages paid to an employee beyond $7,000 in a calendar year are not subject to the unemployment tax. Understanding this limit is essential for businesses when calculating their payroll taxes, as it directly affects their tax liabilities and budgeting for employee compensation. Recognizing the threshold is important for compliance and fiscal responsibility. Employers must track wages accurately to ensure they apply the appropriate taxable amount within this limit, benefiting their overall financial planning and adherence to tax regulations.

The correct taxable wage amount for each employee during a calendar year is $7,000. In South Carolina, this figure aligns with the Federal Unemployment Tax (FUTA) threshold, which states that the first $7,000 of each employee's wages is subject to unemployment tax.

This means that any wages paid to an employee beyond $7,000 in a calendar year are not subject to the unemployment tax. Understanding this limit is essential for businesses when calculating their payroll taxes, as it directly affects their tax liabilities and budgeting for employee compensation.

Recognizing the threshold is important for compliance and fiscal responsibility. Employers must track wages accurately to ensure they apply the appropriate taxable amount within this limit, benefiting their overall financial planning and adherence to tax regulations.