An employee receives an hourly wage rate of $15, with time and a half for all hours worked in excess of 40 during the first week of the calendar year. Payroll data for the first week of the calendar year are as follows: hours worked, 48; federal income tax withheld, $120; social security tax rate, 6%; and Medicare tax rate, 1.5%; state unemployment tax, 5.4% on the first $7,000; federal unemployment tax, 0.8% on the first $7,000. What is the net amount to be paid to the employee?

Question

Quizplus · Accepted Answer

Gross pay = Earnings at regular rate + Earnings at overtime rate
Gross pay = [($15 × 40 hours) + ($15 × 1.5 × 8 hours)] = $780
Net pay = Gross pay - (Federal income tax + Social security tax + Medicare tax)
Net pay = $780 - [$120 + ($780 × 6.0%) + ($780 × 1.50%)] = $601.50

An Employee Receives an Hourly Wage Rate of $15, with Time