Question

For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income tax withholding, Social Security tax, and Medicare tax.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:An employee works 42 hours (42 - 40 were overtime hours) during a workweek in December of 2017. He earns $40.50/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $126,600 during the year. He has requested that his employer withhold 7% of gross pay, which is to be contributed to a 403(b) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

2:. An employee works 37 regular hours during a workweek in August of 2017. He was hired four years ago, earns a salary of $135,100/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

3:An employee works 50 hours (50 - 40 were overtime hours) during a workweek in December of 2017. He earns $9,500/month, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $109,700 during the year. He has requested that his employer withhold 13% of gross pay to contribute to a 403(b) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

For each employee listed, use the wage-bracket method to calculate federal income tax withholding. Refer to Appendix A, 2017 Federal Tax Tables in your textbook.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:Paul Yount (married; 7 federal withholding allowances) earned weekly gross pay of $605.

Federal income tax withholding = $

2:Paulina Robinson (single; 3 federal withholding allowances) earned biweekly gross pay of $1,245. She contributes $75 to a flexible spending account during the period.

Federal income tax withholding = $

3:Lacey Kunis (single; 2 federal withholding allowances) earned monthly gross pay of $3,090. For each period, she makes a 401(k) contribution of 11% of gross pay.

Federal income tax withholding = $

4:Francine Stewart (married; 4 federal withholding allowances) earned semimonthly gross pay of $1,420. She contributes $125 to a cafeteria plan during the period.

Federal income tax withholding = $

Answer 1

Calculation Of Gross Pay

Note:

Since income is paid on hourly basis

Formula shall be applied to calculate Gross pay per month = (hourly pay)x(hours/week)x52/12

For Overtime it is calculated in same way and added to Gross income

($)

Employee 1

Gross Income per month

7,020.00

Add:

Overtime(2*40.5*1.5*52/12)

526.50

Gross pay per month

7,546.50

Less:

7 % Gross pay contributed

528.26

to a 403(b) Plan

Net Taxable Income

7,018.25

In this wages are paid on annual basis, therefore gross pay per month is calculated by dividing annual salary by 12

($)

Employee 2

Gross Income per month

1,125.00

Less:

13 % Gross pay contributed

146.25

Net Taxable Income

978.75

Already given in question

Employee 3

Gross Income per month

9500

Less:

13 % Gross pay contributed

1235

Net Taxable Income

8265