Question

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	$2,510 per week		$28 per hour		$50 per hour
Overtime earnings rate	Not applicable		2 times hourly rate		1.5 times hourly rate
Federal income tax withheld	$920		$240		$495

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 54 hours and the administrator worked 65 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

Answer:

Determine the gross pay and the net pay for each of the three employees for the current pay period

Gross pay:
Consultant	2510
Computer programmer	1904	=(40*28)+(28*2*(54-40))
Administrator	3875	=(40*50)+((65-40)*50*1.5)
	Consultant	Computer programmer	Administrator
Gross pay	2510	1904	3875
Less:Deductions
Social Security tax(2510*6	2510*6%=150.6	1904*6%=114.24	3875*6%=232.5
Medicane tax	2510*1.5%=37.65	1904*1.5%=28.56	3875*1.5%=58.125
Federal income tax	920	240	495
Net pay	2510-150.6-37.65-920=1401.75	1904-114.24-28.56-240=1521.2	3875-232.5-58.125-495=3089.375