Question

Tami Strand’s regular hourly wage rate is $10, and she receives an hourly rate of $20 for work in excess of 40 hours. During a January pay period, Tami works 50 hours. Tami’s federal income tax withholding is $88, and she has no voluntary deductions. Assume that the FICA tax rate is 7.65%.

Compute Tami Strand’s gross earnings and net pay for the pay period.

Answer 1

Gross earnings = $600

Net pay = $466.10

Step-by-step explanation:

The computation of the gross earnings and the net pay is shown below:

Gross earnings

40 hours × $10 = $400

10 hours × $20 = $200

So, the total = $600

Since tami worked for 50 hours, 10 hours extra so $20 is paid for 1 hours extra. So, for 10 hours it would be $200

Net pay

Gross earnings $600

less: federal income tax withholding -$88

Less: FICA tax rate @7.65% on $600 - $45.90

Net pay $466.10