Question

Betsy Strand’s regular hourly wage rate is $24, and she receives an hourly rate of $36 for work in excess of 40 hours. During a January pay period, Betsy works 45 hours. Betsy’s federal income tax withholding is $86, and she has no voluntary deductions. Compute Betsy Strand’s gross earnings and net pay for the pay period. Assume that the FICA tax rate is 7.65%.

Answer 1

Betsy’s gross earnings for January period is $1,140

Betsy’s net pay for January period is $966.79

Explanation:

• Betsy Strand’s regular hourly wage rate = $24
• Betsy Strand’s hourly rate for work in excess of 40 hours = $36
• Betsy works during a January pay period = 45 hours.
• Betsy's pay for January period = $24 * 40 + $36 * 5
• Betsy's pay for January period = $1,140

Betsy’s gross earnings for January period is $1,140

• Betsy’s federal income tax withholding = $86
• FICA tax rate  = 7.65%.
• Betsy’s FICA Taxes Payable = $1,140  * (7.65 / 100)
• Betsy’s FICA Taxes Payable = $87.21
• Betsy’s net pay for January period = Gross earnings - Federal income tax withholding - FICA Taxes
• Betsy’s net pay for January period = $1,140 - $86 - $87.21
• Betsy’s net pay for January period = $966.79

Betsy’s net pay for January period is $966.79