Question

Calculate Payroll Breakin Away 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	$2,710 per week		$28 per hour		$50 per hour
Overtime earnings rate	Not applicable		1.5 times hourly rate		2 times hourly rate
Number of withholding allowances	3		2		1

For the current pay period, the computer programmer worked 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined by adding $356.90 to 28% of the difference between the employee's amount subject to withholding and $1,796.00. Assume further that the social security tax rate was 6%, the Medicare tax rate was 1.5%, and one withholding allowance is $70.

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.

a)Consultant

Gross Pay

Net pay

b)Computer Programmer

Gross Pay

Net pay

c) Administrator

Gross pay $

Net pay $

Answer 1

ANSWER:-( I didn't understand the adjustment of Federal income tax. So I answered this question ignoring that adjustment. Thank You)

(1). Consultant :-

Gross pay=$2,710

Deductions:- 1. Social security tax=$163

2. Medicare Tax=$41

3. Withholding allowance=70×3=$210

Net Pay=2,710-163-41-210=$2,296

(2). Computer programmer

Gross pay:-

28×40=$1,120

Overtime=28×1.5×20=$840

Gross pay=1,120+840=$1,960

Deductions:- 1. Social security=$118

2. Medicare=$29

3. Withholding allowance=70×2=$140

Net pay=1,960-118-29-140=$1,673

(3). Administrator

Gross pay:-

50×40=$2,000

Overtime=50×2×10=$1,000

Gross pay=$3,000

Deductions:- 1. Social Security=$180

2. Medicare=45

3. Withholdimg allowance=70×1=70

Net pay=3,000-180-45-70=$2,705