Donohue Professional Services has three employees-a consultant, a computer progr

Question

Donohue Professional Services has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: Consultant Computer Programmer Administrator Regular earnings rate $2,310 per week $30 per hour $40 per hour Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 3 2 1 For the current pay period, the computer programmer worked 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined by adding $340.44 to 28% of the difference between the employee's amount subject to withholding and $1,687.00. Assume further that the social security tax rate was 6%, the Medicare tax rate was 1.5%, and one withholding allowance is $70. Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places

Explanation / Answer

Particulars Consultant Computer Programmer Administrator Regular earnings rate $2,310 per week $30 per hour $40 per hour Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 3 2 1 Total Hours worked 60 hours 50 hours Total basic Income $ $2,310 1800 2000 Overtime Hours 0 20 Hours 10 Hours Overtime earnings $ 0 900 800 (20X30X1.5) (10X40X2) a Total Gross Pay $2,380 $2,770 $2,870 b Less Exemption withholding allowance $70 $70 $70 c Adjusted Gross Pay $2,310 $2,700 $2,800 d **federal income tax withheld 514.88 624.08 652.08 ($2310-$1687)*28%)+$340.44 $2700-1687)*28%)+340.44 ($2800-1687)*28%)+340.44 e (aX6%) social security tax @6% ($) 142.8 166.2 172.2 f (aX1.5%) Medicare tax @ 1.50% ($) 35.7 41.55 43.05 g (d+e+f) Total Withholding 693.38 831.83 867.33 h (a-g) Net Pay $1,687 $1,938 $2,003 normal working hours in a week are 40 hours

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