Question

In: Accounting

Suppose you are single and work for a company that pays you $24/hour for all regular...

Suppose you are single and work for a company that pays you $24/hour for all regular hours and time -and-a-half for any weekly hours exceeding 40 hours.In a typical workweek, you work 44 hours. Assume you are paid biweekly. Find the following for each biweekly pay. The tax year does not matter.

1)Gross Wages

2)FICA

3)Medicare

4)SDI

5)State Tax (3.1%)

6)Local Tax (1.2%)

7)Federal Withholding (Assume 2 withholding allowances, use percentage method.)

8)Net earnings to the nearest penny.

9)What percent of gross is taken away for deductions? Write your answer to the nearest tenth of a percent.

Solutions

Expert Solution

Particulars

Amount ($)

Gross wages (80 x 24+ 8 x 36)

2208

FICA 6.2%

136.896

Medicare @ 1.45% (2208 x 1.45%)

32.016

SDI @0.1% (2208 x 0.1%)

2.208

State tax (2208 x 3.1%)

68.448

Local tax @1.2% (2208 x 1.2%)

26.496

Federal withholding @24% assuming the annual wages will continue in the current trend

529.92

Net earnings nearest penny

Gross wages (80 x 24+ 8 x 36)

2208

Less: All deductions (Note 1)

795.984

Net earnings nearest penny

1412.02

Percentage of gross income taken from deduction (795.984 x 100/2208)

36.05

Nearest 10th of a percentage

40%

Working note 1:

FICA 6.2%

136.896

Medicare @ 1.45% (2208 x 1.45%)

32.016

SDI @0.1% (2208 x 0.1%)

2.208

State tax (2208 x 3.1%)

68.448

Local tax @1.2% (2208 x 1.2%)

26.496

Federal withholding @24% assuming the annual wages will continue in the current trend

529.92

Total deductions

795.984


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