Question

An employee receives an hourly wage rate of $16, with time and a half for all hours worked in excess of 40 hours during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $360; social security tax rate, 6.0%; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the employee? Select the correct answer. $1,053 $365 $784 $1,045

Answer 1

Answer:

$365

Explanation:

The calculation of net amount to be paid to the employee is shown below:-

Net pay = (40 × $16) + (6 × $16 × 1.5)

= $640 + 144

= $784

Net amount to be paid to the employee = Net pay - Social security tax - Medicare - Federal income tax withheld

= $784 - ($784 × 6%) - ($784 × 1.5%) - $360

= $784 - $47.04 - $11.76 - $360

= $365.2

or

= $365

So, for computing the net amount to be paid to the employee we simply applied the above formula.