Question

Breakin Away Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

	Consultant		Computer Programmer		Administrator
Regular earnings rate	$3,310 per week		$28 per hour		$40 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 The total earnings of an employee for a payroll period.gross pay and the Gross pay less payroll deductions; the amount the employer is obligated to pay the employee.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.

Answer 1

Particulars			consultant	computer progm	administrator
regular earning (28*40),(40*40)			3310	1120	1600
overtime earning			NA	840	800
			NA	(1.5*20HR*28)	(2*10HRS*40)
Gross pay (1)			3310	1960	2400
federal income tax withheld (2)			570.82	262.82	456.02
security tax @6% 0f gross pay			198.6	117.6	144
medicare tax @ 1.5% gross pay			49.65	29.4	36
total tax exp (3)			248.25	147	180
net pay = 1-2-3			2490.93	1550.18	1763.98
amount of withholding
consultant = 28%*(3310-1796) = 423.92
withholding amt consultant = 356.90+423.92 = 780.82
withholding allowance = 70*3 = 210
withholding amt = 780.82-210 = 570.82
computer programmer = (1960-1796)*28% = 45.92
withholding amount = 356.90+45.92 = 402.82
allowance = 70*2 =140
withholding amt = 402.82-140 = 262.82
administrator = (2400-1796)*28% = 169.12
with holding amt = 356.90+169.12 = 526.02
allowance = 70*1 = 70
withholding amount = 526.02-70 = 456.02