Question

Chapter 10 - 4

Calculate Payroll

K. Mello Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

	Consultant		Computer Programmer		Administrator
Regular earnings rate	$3,210 per week		$34 per hour		$40 per hour
Overtime earnings rate	Not applicable		2 times hourly rate		1.5 times hourly rate
Federal income tax withheld	$920		$244		$510

For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.

For the current pay period, the computer programmer worked 51 hours and the administrator worked 64 hours. Assume further that the social security tax rate was 6%, and the Medicare tax rate was 1.5%.

Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places.

	Consultant	Computer Programmer	Administrator
Gross pay	$	$	$
Net pay	$	$	$

Answer 1

Consultant:
Gross pay	3210
Less:
Federal income tax withheld	920
Social security tax	192.6	=3210*6%
Medicare tax	48.15	=3210*1.5%
Net pay	2049.25
Computer Programmer:
Gross pay	2108	=(40*34)+(11*34*2)
Less:
Federal income tax withheld	244
Social security tax	126.48	=2108*6%
Medicare tax	31.62	=2108*1.5%
Net pay	1705.9
Administrator:
Gross pay	3040	=(40*40)+(24*40*1.5)
Less:
Federal income tax withheld	510
Social security tax	182.4	=3040*6%
Medicare tax	45.6	=3040*1.5%
Net pay	2302