Breakin Away Company has three employees—a consultant, a computer programmer, an
ID: 2527018 • Letter: B
Question
Breakin Away Company has three employees—a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:
For the current pay period, the computer programmer worked 50 hours and the administrator worked 48 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 2. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and one withholding allowance is $75.
Determine the gross pay and the net pay for each of the three employees for the current pay period. If required, round your answers to two decimal places.
Consultant Computer Programmer Administrator Regular earnings rate $4,000 per week $60 per hour $50 per hour Overtime earnings rate* Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 2 1 2 * For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.Explanation / Answer
Consultant Computer Programmer Administrator Regular earning R $4,000 $2,400 $2,000 (60*40) (50*40) Overtime earning O 900 800 ($60*10*1.5) ($50*8*2) Gross pay G= R+O $4,000 $3,300 $2,800 Social security taxes payable (G*6%) $240.00 $198.00 $168.00 Medicare taxes payable (G*1.45%) $58.00 $47.85 $40.60 Federal Income tax withheld 857.16 809.16 509.16 Net pay G-S-M-F $2,844.84 $2,244.99 $2,082.24 working Assuming wage paid in 2018 Consultant Computer Programmer Administrator Federal Income tax withheld Gross pay $4,000 $3,300 $2,800 Less: withholding allowance 150 75 150 Income subject to withheld $3,850 $3,225 $2,650 Income tax withheld 857.16 809.16 509.16 617.16+(32%*(3850-3100)) 617.16+(32%*(3850-32250)) 271.08+(24%*(2650-1658)
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