An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46 federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid the employee?
A) $875.00
B) $838.62
C) $857.00
D) $1,133.14

Question

Quizplus · Accepted Answer

The employee earns $25 per hour for the first 40 hours and $37.50 (time and a half) for the 6 overtime hours. Total earnings are $1,150. Social security tax is calculated on $300 (since $99,700 + $1,150 exceeds $100,000), which is $18. Medicare tax is 1.5% of $1,150, which is $17.25. The net pay is $1,150 - $350 (federal tax) - $18 (social security) - $17.25 (Medicare) = $764.75. However, the correct calculation should be $1,150 - $350 - $18 - $17.25 = $764.75, but the closest option is $838.62, which suggests a miscalculation in the options provided.

An Employee Receives an Hourly Rate of $25, with Time