An employee receives an hourly rate of $25, 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, 45; federal income tax withheld, $350; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to the employee?

Question

Business

Emmett Walters

15 November, 16:27

An employee receives an hourly rate of $25, 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, 45; federal income tax withheld, $350; social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to the employee?

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Piglet · Answer 1

The correct answer is $748.425

Explanation:

Wage Rate of Employee: $25

Over time of Employee: $25 + $12.5 = $37.5

Normal work hours: 40

According to data, total hours worked by employee: 45

Overtime hours: 5

So normal work hour wage would be: 40 * 25 = 1000

Overtime wage would be: 5 * 37.5 = 187.5

Total wage for the week:

1000+187.5 = 1187.5

This is the gross income.

NOW for net income, we would deduct all the taxes from the gross salary.

Federal income tax deductions: = 1187.5-350 = 837.5

Social Security is 6% of Gross pay. So 1187.5 * 0.06 = 71.25

Medicare Tax is 1.5% of Gross pay. So 1187.5 * 0.015 = 17.8125

Net Income = Gross salary - Federal income tax - Social security - Medicare Tax = 1187.5 - 350 - 71.25 - 17.1825

= $748.425