Question

Calculate Payroll

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	$2,310 per week		$34 per hour		$42 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 gross pay and the 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.

	Consultant	Computer Programmer	Administrator
Gross pay	$	$	$
Net pay	$	$	$

Answer 1

Answer :- calculation of gross pay

Gross pay = regular pay + overtime pay

For consultant

Gross pay =$ 2310+0 = $ 2310

For computer programmer

Gross pay = ($ 34*40)+ ($34 *20*1.5)

=$1360+ $1020

=$2380

For administrator

Gross pay=($42* 40)+($42*10 hours *2)

= $1680+ $840

=$2520

Consultant (C); computer programmer(CP)

Administrator(A)

Computation of income tax with holding

Particular. C. CP. A

Gross weekly pay $2310. $2380. $2520

No. Of withholding.   

Allowances. 3. 2. 1

Values of one

Allowances. $70. $70. $70

Amount to be

Deducted. $210. $140. $70

Amount subject

to withholding. $ 2100. $2240. $2450

Initial withholding. $356.90. $356.90. $356.90

Bracket % over (2100-. (2240-1796). (2450-

Bracket 1796)*28%. *28%. 1796)*28%

Excess. 85.12. 124.32. 183.12

Amount withholding $442.02. $481.22. $540.02

(Initial withholding+bucket excess)

Computation of net pay

For consultant

Gross pay. $2310

(-) deduction. 0

Income tax withholding. (442.02)

Social security tax. (2310* 6%). (138.6)

Medical tax. (2310 *1.5%). ( 34. 65)

Net pay. $1694.73

For computer programmer

Gross pay $2380

Less:- deduction 0

Income tax withholding. ( $481.22)

Social security tax.($2380*6%). ($142.8)

Medical tax ($2380*1.5%). ($35.7)

Net pay. ($1720.28)

For administrator

Gross pay ($2520)

Less :- deduction. 0

Income tax withholding. ($540.02)

Social security($2520*6%). ($151.2)

Medical tax. ($2520*1.5%). ($37.8)

Net pay. ($1790.98)