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motikmotik
3 years ago
7

Breakin Away Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll inform

ation is available for each employee: Consultant Computer Programmer Administrator Regular earnings rate $2,310 per week $30 per hour $46 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
Business
1 answer:
Travka [436]3 years ago
8 0

Answer:

Gross pay:

  • consultant $2,310
  • computer programmer $2,100
  • administrator $2,760

Net pay:

  • consultant $1,694.73
  • computer programmer $1,539.68
  • administrator $1,945.78

Explanation:

                                           regular earnings     overtime    withholding  

                                                                                               allowances

Consultant                          $2,310 per week       N/A                3

Computer programmer          $30 per hour        1.5                  2

Administrator                          $46 per hour          2                   1

computer programmer worked 60 hours = ($30 x 40) + ($30 x 20 x 1.5) = $2,100

administrator worked 50 hours = ($46 x 40) + ($46 x 10 x 2) = $2,760

Social security taxes:

  • Consultant = 6% x $2,310 = $138.60                        
  • Computer programmer = 6% x $2,100 = $126        
  • Administrator = 6% x $2,760 = $165.60

Medicare taxes:

  • Consultant = 1.5% x $2,310 = $34.65                        
  • Computer programmer = 1.5% x $2,100 = $31.5        
  • Administrator = 1.5% x $2,760 = $41.40

Federal income taxes:

  • Consultant: amount subject to withholding = $2,310 - (3 x $70) = $2,100. Federal income taxes = $356.90 + [28% x ($2,100 - $1,796) = $442.02                        
  • Computer programmer = amount subject to withholding = $2,100 - (2 x $70) = $1,960. Federal income taxes = $356.90 + [28% x ($1,960 - $1,796) = $402.82            
  • Administrator = amount subject to withholding = $2,760 - $70 = $2,690. Federal income taxes = $356.90 + [28% x ($2,690 - $1,796) = $607.22  

Gross pay:

  • consultant $2,310
  • computer programmer $2,100
  • administrator $2,760

Net pay:

  • consultant $2,310 - ($138.60 + $34.65 + $442.02) = $1,694.73
  • computer programmer $2,100 - ($126 + $31.50 + $402.82) = $1,539.68
  • administrator $2,760 - ($165.60 + $41.40 + $607.22) = $1,945.78
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