Lenny Florita, an unmarried employee, works 45 hours In the week ended January 1

Question

Lenny Florita, an unmarried employee, works 45 hours In the week ended January 12. His pay rate Is $14 per hour, and hls wages are subject to no deductions other than FICA Social Security, FICA Medicare, and federal Income taxes. He clalms four withholding allowances. Compute his regular pay, overtime pay (for this company, workers earn 150% of their regular rate for hours in excess of 40 per week), and gross pay. Then compute his FICA tax deduction (use 6.2% for the Social Security portion and 1.45% for the Medicare portion). Income tax deduction (use the wage bracket withholding table from Exhibit 11461 total deductions, and net pay. (Round your Intermedlete celculations and final answers to 2 declmal places.) Hours Hourly Rate Regular pay Overtime pay 0.00 Gross pay FICA Social Security tax deduction FICA Medicare tax deduction Income tax deduction Total deductions Net pay

Explanation / Answer

Hourly rate for regular pay = $14 per hour

Hourly rate for overtime pay = 150% of regular rate = 150% of $14 = $21 per hour

Calculation of gross pay and net pay (Amount in $)

WN1) For the purpose of calculating income tax deduction, the exhibit 11A.6 is used. In the table the relevant row is:-

For wages at least $660 and less than $670 = $48 (As the number of witholding allowances claimed is 4)

Regular pay 40 hours*$14 per hour 560.00 Overtime pay (45-40) hours*$21 per hour 105.00 Gross Pay (560+105) 665.00 FICA-Social security tax deduction (665*6.2%) 41.23 FICA-Medicare tax deduction (665*1.45%) 9.64 Income tax deduction (WN1) 48.00 Total deductions (41.23+9.64+48.00) 98.87 Net pay (665-98.87) 566.13

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