Lisa Meilo works for Pacific Company, which pays its employees time-and-a-half f

Question

Lisa Meilo works for Pacific Company, which pays its employees time-and-a-half for all hours worked in excess of 40 per week. Meilo's pay rate is $38.00 per hour. Her wages are subject to federal income tax, a Social Security tax deduction at the rate of 6.2 percent, and a Medicare tax deduction at the rate of 1.45 percent. She is married and claims three allowances. Meilo has an unpaid half-hour lunch break during an 8½-hour day. In the most recent pay period, she worked 50 hours. Meilo's beginning cumulative earnings are $71,440. Complete the following. If required, round all intermediate calculations and answers to the nearest cent, use rounded answers in subsequent computations. a ---------. hours at straight time × $ ------ per hour $ ------ b. ------- hours overtime × $ ------ per hour ------ c. Total gross pay $ ------ d. Federal income tax withholding $263.00 e. Social Security tax withholding at 6.2 percent -------- f. Medicare tax withholding at 1.45 percent -------- g. Total withholding ----- h. Net pay $ --------

Explanation / Answer

a 37.5hours( 40 hours-2.5hours) at straight time × $ 38per hour = $1425

Unpaid hours in week = 0.5 hour * 5 days =2.5 hours

b. 10 hours overtime ×$57 ( $ 38 per hour *1.5) =$570

c. Total gross pay = $71,440 +$1425+$570 =$73,435

d. Federal income tax withholding $263.00

e. Social Security tax withholding at 6.2 percent = $4553($73,435*6.2%)

f. Medicare tax withholding at 1.45 percent = $1065 ($73,435*1.45%)

g. Total withholding = $5881($263.00+ $4552.97+$1065 )

h. Net pay $ =$73,435 -$5,881 =$67,554

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