Question

1. Mr. Sadiq, working in manufacturing industry, he is one of the employee of daily wages. The straight time wage per hour OMR 25 He was worked 100 hours. Over time also consideration of 20 hours @double the rate. The employer with hold income Tax 15%, Employee FICA –OASDI 5.5%, Medicare – 2%. The employer also pays payroll taxes for FICA 6%, Medicare 2% and state 6% and federal unemployment 0.8% respectively.

Requirements:

1. Compute Mr. Sadiq gross pay and net (Take-home) pay for the week.
2. Record the payroll entries that employers, employee taxes and employer taxes.

Answer 1

a.

Gross Pay		$     3,500.00
Withholding Deductions
Employee Income Tax	$        525.00
Employee FICA Social Security Tax	$        192.50
Employee FICA Medicare Tax	$           70.00
Total Withholding Deductions		$        787.50
Net (take-home) Pay		$     2,712.50

b.

Account Titles	Debit	Credit
Salaries Expense	$     3,500.00
Income Tax Payable		$        525.00
FICA OSADI Payable		$        192.50
FICA Medicare Tax Payable		$           70.00
Cash		$     2,712.50
Account Titles	Debit	Credit
Payroll Tax Expense	$        518.00
FICA OSADI Payable		$        210.00
FICA Medicare Tax Payable		$           70.00
FUTA Payable		$           28.00
SUTA Payable		$        210.00