Question

An employee receives an hourly rate of $30, with time and a half for all hours worked in excess of 40 during a week. payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $300; cumulative earnings for year prior to current week, $90,700; social security tax rate, 6.0% on maximum of $100,000; and medicare tax rate, 1.5% on all earnings. what is the net amount to be paid the employee?
a. $1,470
b. $1,059.75
c. $1,381.80
d. $1,249.50

Answer 1

I would say $1059.75 is the net amount the employee would receive for the current week after the deductions. The pay for this employee is 40 hrs x $30= $1200+(6 x $45)$270=$1470. Federal income tax deducted is $300, social security is 6% = 0.06x$1470= $88.20 and medicare is 1.5% = 0.015 x $1470=$22.05. So gross pay = $1470-$300-$88.20-$22.05= $1059.75.