Question

Calculate 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	$2,710 per week		$34 per hour		$46 per hour
Overtime earnings rate	Not applicable		2 times hourly rate		1.5 times hourly rate
Federal income tax withheld	$920		$247		$505

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 51 hours and the administrator worked 64 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	$	$	$
Net pay	$	$	$

Answer 1

Gross Pay -

Consultant = 2710 for one week - As overtime is not applied to Consultant.

Computer Programmer = Regular Earning (34*51 = 1734 )+ Bonus (2*34*(51-40)) = 748

So, total pay 1734+748 = 2482

Here, in Computer Programmer, He worked for 51 hours hence overtime hours are in excess of 40 hours,so 51-40=11 hours are overtime hours.

Administrator = Regular Earning (46*64 = 2944 )+ Bonus (1.5*46*(64-40)) = 1656

So, total pay 2944+1656= 4600

Here, in Administrator, He worked for 64 hours hence overtime hours are in excess of 40 hours,so 64-40=24 hours are overtime hours.

Net pay = Gross payes - taxes

Consultant = 2710 - 920 - 6% of 2710 - 1.5% of 2710 = 1586.75

Computer Programmer = 2482 - 247 - 6% of 2482 - 1.5% of 2482 = 2048.85

Administrator = 4600 - 505 - 6% of 4600 - 1.5% of 4600 = 3750