Question

An employee earns $32 per hour and 1.75 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 55 hours during the week, and that the gross pay prior to the current week totaled $46,400. 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 $509.

a. Determine the gross pay for the week.
$

If applicable, round your final answer to two decimal places.

b. Determine the net pay for the week.
$

Answer 1

Answer :-

(a) Calculation of Gross pay for the week are as follows:-

= ($32 per hour * 55 hrs during week) + ($32 per hour * (55 hrs - 40 hrs) * 1.75 times rate)

= $1,760 + $840

= $2,600

So, Gross Pay for Week is $2,600

(b) Calculation of Net pay for the week are as follows:-

Gross pay per week = $2,600

Less :- Social Security Tax ($2,600 * 6.0%) = $156

Less :- Medicare tax rate ($2,600 * 1.5%) = $39

Less :- ederal income tax = $509

Net Pay for week = $1,896

So, Net Pay for week is $1,896