Question

Calculate Payroll

An employee earns $24 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, and that the gross pay prior to the current week totaled $34,800. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and federal income tax to be withheld was $304.

If required, round your answers to two decimal places.

a. Determine the gross pay for the week.
$

b. Determine the net pay for the week.
$

Answer 1

Answer and Explanation:

To calculate the gross and net pay for the week, let's follow these steps:

a. Determine the gross pay for the week:

The employee worked 50 hours during the week, and for the first 40 hours, the pay rate is $24 per hour. For the additional 10 hours, the pay rate is 1.5 times the regular rate.

- Pay for the first 40 hours: 40 hours * $24/hour = $960.

- Pay for the additional 10 hours: 10 hours * $24/hour * 1.5 = $360.

- Total gross pay for the week: $960 + $360 = $1320.

Therefore, the gross pay for the week is $1320.

b. Determine the net pay for the week:

To calculate the net pay, we need to deduct taxes and withholdings from the gross pay.

- Social Security tax: 6.0% of the gross pay = 0.06 * $1320 = $79.20.

- Medicare tax: 1.5% of the gross pay = 0.015 * $1320 = $19.80.

- Federal income tax: $304 (already given).

Total deductions: $79.20 + $19.80 + $304 = $403.

Net pay for the week: Gross pay - Total deductions = $1320 - $403 = $917.

Therefore, the net pay for the week is $917.