Question

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 55 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 $345.

Required:
a. Determine the gross pay for the week.
b. Determine the net pay for the week.

Answer 1

Gross pay for the week is $1,500

Net pay for the week is $1,043

Step-by-step explanation:

The gross pay is computed thus:

Normal rate pay 40 hrs*$24 =$960

Above normal pay(55-40)*$24*1.5 =$540

Gross pay $1,500

Deductions:

Social security(6.0%*$1,500) ($90)

Medicare(1.5%*$1,500) ($22.5)

Federal income tax ($345)

Net pay for the week $1,043

The net pay for the week is gross pay less social security tax,medicare as well as the federal income tax,$1043 is the employee net pay for the week