Question

Joe makes an hourly wage of $14.10. For hours worked over 40, he is paid at a rate of $21.15 per hour. Last week Joe worked 45 hours. Answer the following questions…

a- What is Joe’s gross pay for this pay period ?

b- What is Joe’s Social security deduction ?

c- What is Joe’s Medicare Tax deduction ?

d- Joe’s other deductions are: Federal tax $61.12, State Tax $21.03, City Tax $6.01, Retirement Insurance $4.12, Disability Insurance $1.31, Medical Insurance $13.05, and Dental Insurance $5.46. What are Joe’s Total Deductions for this pay period ?

e- What are Joe’s total deductions for this pay period ?

f- If Joe pays the same amount for Medical Insurance each weekly pay period, What is his annual premium ?

Answer 1

a- Joe worked 45 hours and is paid at a rate of $14.10 per hour for the first 40 hours and $21.15 per hour for the additional 5 hours. So, his gross pay for this pay period is:

40 hours x $14.10/hour = $564.00

5 hours x $21.15/hour = $105.75

Total gross pay = $564.00 + $105.75 = $669.75

b- Social security tax is 6.2% of gross pay. So, Joe's Social security deduction is:

$669.75 x 6.2% = $41.51

c- Medicare tax is 1.45% of gross pay. So, Joe's Medicare Tax deduction is:

$669.75 x 1.45% = $9.71

d- Joe’s Total Deductions for this pay period are:

$61.12 (Federal Tax) + $21.03 (State Tax) + $6.01 (City Tax) + $4.12 (Retirement Insurance) + $1.31 (Disability Insurance) + $13.05 (Medical Insurance) + $5.46 (Dental Insurance) = $112.10

e- Joe’s Total Deductions for this pay period are $112.10.

f- Joe pays $13.05 for Medical Insurance each weekly pay period. To calculate his annual premium, we can use the following formula:

Annual premium = Weekly premium x Number of weeks in a year

Weekly premium = $13.05

Number of weeks in a year = 52

Annual premium = $13.05 x 52 = $678.60