Question

Compute payroll An employee earns $28 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week. Assume that the FICA tax rate is 7.5% and that federal income tax of $354 was withheld. a. Determine the gross pay for the week. $ b. Determine the net pay for the week. Round intermediate calculations and your final answer to the nearest cent, if rounding is required. $

Answer 1

a. The gross pay for the week is $1540

b. The net pay for the week is $ 1070.5

Step-by-step explanation:

For the weekly gross pay we account for the earning before the deductions. The weekly gross pay PG is computed in terms of the first 40 hours at $28 per hour and the next 10 hours at $42 per hour (1.5*$28):

PG = 40 hr * $28/hr + 10 * $42/hr = $1540

The net pay is the gross pay less deductions. The deduction of the FICA tax rate of 7.5% Df is:

Df = $1540 * (7.5%)

Df = $1540 * (0.075) = $ 115.5

By adding the federal income tax of $354 Di the total deductions is:

D = Df + Di = $ 115.5 + $354 = $469.5

Then the net pay is:

PN = PG - D = $1540 - $469.5 = $1070.5