An employee earns $50 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week

An employee earns $50 per hour and 2 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 50 hours during the week. 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 $686.

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


Answer:











a. Regular pay (40 hrs. × $50)…………………………………………… $2,000
Overtime pay (10 hrs. × $100)………………………………………… 1,000
Gross pay……………………………………………………………… $3,000
b. Gross pay……………………………………………………………… $3,000
Less: Social security tax (6% × $3,000)…………………………… $180
Medicare tax (1.5% × $3,000)……………………………… 45
Federal withholding………………………………………… 686 911
Net pay…………………………………………………………………… $2,089