Question

Sadie White receives an hourly rate of $30, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $300; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to White?

a. $1,443
b. $1,143
c. $1,260
d. $1,560

Answer 1

Sadie White's net pay is calculated by determining her gross pay from her hourly rate and overtime.

Step-by-step explanation:

Sadie worked 48 hours in the week, with 8 of those being overtime hours. Her normal pay rate is $30 per hour, so for the first 40 hours, she would earn 40 hours * $30/hour = $1200. For the 8 overtime hours, she earns time and a half, which is $30 * 1.5 = $45 per hour, so her overtime pay is 8 hours * $45/hour = $360. Sadie’s total gross pay before deductions is therefore $1200 + $360 = $1560.

Next, we need to calculate the deductions. She has a federal income tax withholding of $300. The Social Security tax is calculated at 6.2% of her gross pay: $1560 * 0.062 = $96.72. The Medicare tax rate is 1.45% of gross pay: $1560 * 0.0145 = $22.62. Total deductions sum up to $300 + $96.72 + $22.62 = $419.34.

Finally, the net amount to be paid to Sadie is her gross pay minus the total deductions: $1560 - $419.34 = $1140.66. Since none of the provided options match this exact amount, we can conclude that there must be a rounding discrepancy or an error in the available options.