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27 August, 01:31

Hernandez Builders has a gross payroll for January amounting to $500,000. The following amounts have been withheld: Federal income taxes $63,000 Social Security 31,000 Medicare 7,250 Charitable contributions 1% of gross pay Union dues 2% of gross pay Also, the federal unemployment tax rate is 6.2% and applies to all but $50,000 of the gross payroll. Required: 1. What is the amount of net pay recorded by Hernandez

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  1. 27 August, 03:04
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    Net pay is $383,750

    Explanation:

    Hermandez builders net pay can be computed by deducting the following from the gross payroll amount:

    Federal income taxes

    social security

    medicare

    charitable contributions

    union dues

    The net pay is computed thus:

    Gross payroll pay $500,000

    Federal income taxes $63,000

    Social security $31,000

    medicare $7,250

    charitable contributions (1%*$500000) $5,000

    union dues (2%*$500000) $10,000

    ($116,250)

    Net pay $383,750
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