An employee receives an hourly rate of $27,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,46;federal income tax withheld,$350;cumulative earnings for year prior to current week,$99,700;social security tax rate,6.0% on maximum of $106,800;and Medicare tax rate,1.5% on all earnings.What is the gross pay for the employee?

Question

Quizplus · Accepted Answer

To calculate the gross pay, we need to first calculate the regular pay for the first 40 hours and then add the overtime pay for the additional 6 hours.

Regular pay = 40 hours * $27 per hour = $1,080
Overtime pay = 6 hours * ($27 * 1.5) = $243
Total gross pay = Regular pay + Overtime pay = $1,323

Next, we need to calculate the taxes withheld:

Social security tax = 6% of $106,800 (maximum taxable earnings) = $6,408 (this is the annual maximum, so we don't need to prorate it for the current week)
Medicare tax = 1.5% of Total gross pay = 0.015 * $1,323 = $19.84

Finally, we can calculate the net pay by subtracting the taxes withheld from the gross pay:

Net pay = Gross pay - Federal income tax - Social security tax - Medicare tax
Net pay = $1,323 - $350 - $6,408 - $19.84
Net pay = $946.77

Therefore, the gross pay for the employee is $1,323.00 (D).

An Employee Receives an Hourly Rate of $27,with Time and a Half