Can some one pls explain following question :-

this what i would do:

20,000 gross salary

Co. pays 7% of gross salalry $1400 - matching of FICA

Co. withholds 1400 for FICA from employee

Co. withholds 2500 (given) federal tax

So the gross salary is 20,000

the Net salary is 16100

the tax withholdings to employee 3900

Therefore the total amount needed in checking account is 21,400. 20,000 which includes the net salary + withholdings and the Co. share of FICA 1400.

Federal income taxes withheld from employees' wages are not matched by the employer. As each pay period ends, payroll is calculated and the exact amount that is deducted from each employee for federal income tax withholding is posted to a liability account as a credit. This amount must then be paid to the Internal Revenue Service within a specified period of time.

Thanks, wannabe, cpahopeful and ysjd.patel. Very helpful explanations, indeed !

Looking from perspective of the company,

Company would be paying its portion of FICA $1400 plus would remit gross wages $20,000 to payroll checking a/c.

Now, from payroll checking account, only $16,100 net salary would be paid to employee and rest - federal, FICA - employer & employee portion would be remitted to IRS.

Thanks, again !