Question

alculate Payroll

K. Mello 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	$2,610 per week		$36 per hour		$46 per hour
Overtime earnings rate	Not applicable		2 times hourly rate		1.5 times hourly rate
Federal income tax withheld	$920		$239		$500

For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.

For the current pay period, the computer programmer worked 55 hours and the administrator worked 65 hours. Assume further that the social security tax rate was 6%, and the Medicare tax rate was 1.5%.

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	$fill in the blank 1	$fill in the blank 2	$fill in the blank 3
Net pay	$fill in the blank 4	$fill in the blank 5	$fill in the blank 6

Answer 1

Ans: For Consultant:

Gross pay{Given}: 2,610 per week

Federal Income tax withheld= $920

Social Security Tax= 6% of $2,610: 156.60

Medicare tax= 1.5% of $2,610: 39.15

Net Pay= Gross Pay- Federal Income tax withheld- Social Security Tax- Medicare Tax

=> 2,610-920-156.60-39.15

=> $1,494.25

2. For Computer Programmer:

Worked Hours= 55

Regular Hours= 40

Wage rate= 36 hourly Rate

Overtime pay= 2 times

Gross pay= pay for 40 hours+ overtime pay for 15 hours

=> 40*36+ {55-40}*2*36

=> 1,440+ 15*2*36

=> 1,440+ 1,080

=> $2,520

Net pay= Gross Pay- Federal Income tax withheld- Social Security Tax- Medicare Tax

=> 2,520-239- {2,520*6%}-{2,520*1.5%}

=> 2,520- 239- 151.20- 37.80

=> 2,092

3. For Administrator:

Worked Hours= 65

Regular Hours= 40

Wage rate= 46 hourly Rate

Overtime pay= 1.50 times

Gross pay= pay for 40 hours+ overtime pay for 25 hours

=> 40*46+ {65-40}*1.50*46

=> 1,840+ 25*1.50*46

=> 1,840+ 1,725

=> $3,565

Net pay= Gross Pay- Federal Income tax withheld- Social Security Tax- Medicare Tax

=> 3,565- 500- {3,565*6%}-{3,565*1.5%}

=> 3,565- 500- 213.90- 53.475

=> 2,797.625