Question

Calculate Payroll

Donohue Professional Services 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	$3,010 per week		$28 per hour		$42 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 $340.44 to 28% of the difference between the employee's amount subject to withholding and $1,687.00. 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.

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

Answer 1

	Consultant	Programmer	Administrator
Gross Pay	3010.00	1960.00	2310.00
Net Pay	2132.17	1435.32	1641.47

Working:

Employee	Hours worked			Normal	Earnings			Withholding Alowance		Taxable	FIT
	Total	Normal	Overtime	rate/hour	Normal	Overtime	Total	Number	Amount	Earnings
Consultant							3010	3	210	2800	652.08
Computer programmer	60	40	20	28	1120	840	1960	2	140	1820	377.68
Administrator	50	40	10	42	1680	630	2310	1	70	2240	495.28
Employee	Gross	Withholdings				Net Pay
	Earnings	FIT	Social Security	Medicare	Total
Consultant	3010.00	652.08	180.60	45.15	877.83	2132.17
Computer programmer	1960.00	377.68	117.60	29.40	524.68	1435.32
Administrator	2310.00	495.28	138.60	34.65	668.53	1641.47
Total	7280.00	1525.04	436.80	109.20	2071.04	5208.96