Asked by Mandrell Little on May 23, 2024
Verified
An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the first week of the calendar year are as follows: hours worked, 46; federal income tax withheld, $110; Social security tax rate, 6%; and Medicare tax rate, 1.5%; state unemployment tax, 5.4% on the first $7,000; federal unemployment tax, 0.8% on the first $7,000. What is the net amount to be paid to the employee? If required, round your answers to the nearest cent.
A) $569.87
B) $539.00
C) $625.00
D) $544.88
Social Security Tax
A payroll tax that funds the Social Security program, which provides benefits for retirees, the disabled, and children of deceased workers.
Medicare Tax Rate
The percentage of an individual's or employee's earnings that is collected by the government to fund Medicare, a federal health insurance program.
State Unemployment Tax
A tax imposed on employers by the state government to fund unemployment benefits for workers who have lost their jobs.
- Determine the net amount payable to an employee after deductions.
Verified Answer
MM
Maranda MattoxMay 25, 2024
Final Answer :
A
Explanation :
The employee worked 46 hours, with 6 hours being overtime. The calculation is as follows:- Regular pay for 40 hours: 40 hours * $15/hour = $600- Overtime pay for 6 hours: 6 hours * $15/hour * 1.5 (time and a half) = $135- Total gross pay: $600 + $135 = $735Deductions:- Federal income tax: $110- Social security tax: $735 * 6% = $44.10- Medicare tax: $735 * 1.5% = $11.03- State unemployment tax and federal unemployment tax do not apply to the employee's paycheck but to the employer.Net pay = Gross pay - Total deductionsNet pay = $735 - ($110 + $44.10 + $11.03)Net pay = $735 - $165.13Net pay = $569.87
Learning Objectives
- Determine the net amount payable to an employee after deductions.