Question

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, 43; federal income tax withheld, $328; cumulative earnings for year prior to current week, $97,324; social security tax rate, 6.0% on maximum of $104,563; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?

Answer 1

Gross pay = $1,112.5

Step-by-step explanation:

Basic Pay = Hours worked x hourly rate

Basic Pay = 40 x 25

Basic Pay = $1000

Overtime Pay = Overtime hours x (hourly rate x half of hourly rate)

Overtime Pay = 3 x ( 25 x 1.5)

Overtime Pay = $112.5

Gross Pay = Basic pay + Overtime Pay

Gross pay = $1,000 + 112.5

Gross pay = $1,112.5