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 current week are as follows: hours worked,48; federal income tax withheld,$120; social security tax rate,6%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% on the first $7,000.What is the net amount to be paid to the employee?
A)$568.74
B)$601.50
C)$660.00
D)$574.90

Question

Quizplus · Accepted Answer

The employee worked 48 hours, which means they worked 8 hours of overtime. Therefore, their total pay is:

40 hours x $15/hour = $600
8 hours x $22.50/hour (time and a half) = $180
Total pay = $780

Next, we need to calculate the deductions:

Federal income tax withheld = $120
Social Security tax = $780 x 6% = $46.80
Medicare tax = $780 x 1.5% = $11.70
State unemployment compensation tax = $7,000 x 3.4% = $238
Federal unemployment compensation tax = $7,000 x 0.8% = $56

Total deductions = $472.50

To find the net pay, we need to subtract the total deductions from the total pay:

Net pay = $780 - $472.50 = $307.50

However, we also need to add back any pre-tax deductions the employee may have, such as contributions to a retirement plan or health insurance premiums. If there are no pre-tax deductions, the net pay is:

Net pay = $307.50

Therefore, the correct answer is B, $601.50.

An Employee Receives an Hourly Rate of $15,with Time and a Half