An employee receives an hourly wage 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, 6.0%; Medicare tax rate, 1.5%; state unemployment compensation tax, 3.4% on the first $7,000; and 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

Regular pay = 40 hours x $15/hour = $600
Overtime pay = 8 hours x $15/hour x 1.5 = $180
Gross pay = $600 + $180 = $780
Federal income tax withheld = $120
Social security tax = 6.0% x $780 = $46.80
Medicare tax = 1.5% x $780 = $11.70
State unemployment compensation tax = 3.4% x $7,000 = $238
Federal unemployment compensation tax = 0.8% x $7,000 = $56
Total deductions = $120 + $46.80 + $11.70 + $238 + $56 = $472.50
Net pay = $780 - $472.50 = $307.50
Therefore, the net amount to be paid to the employee is $601.50.

An Employee Receives an Hourly Wage Rate of $15, with Time-And-A-Half