Diego Company has three employees—a consultant, a computer programmer, and an ad

Question

Diego 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 55 hours and the administrator worked 52 hours. The federal income tax withheld for all three employees, who are single, can be determined from the wage bracket withholding table in Exhibit 3. 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.

(Answers needed where there are ?????)

Consultant Computer Programmer Administrator Regular earnings rate $3,800 per week $38 per hour $42 per hour Overtime earnings rate* Not applicable 2 times hourly rate 1.5 times hourly rate Number of withholding allowances 1 2 2 * For hourly employees, overtime is paid for hours worked in excess of 40 hours per week.

Explanation / Answer

Consultant Computer Programmer Administrator Gross Pay ( Ref. Calculation below)                 3,800                    2,660                       2,436 Net Pay ( Ref. Calculation below)                 3,096                    2,079                       1,893 Gross Pay calculation Hours worked                          55                             52 Standard Hours                          40                             40 Overtime                          15                             12 Standard rate                          38                             42 Overtime rate                             2                                2 Amount @ standard rate                    1,520                       1,680 Amount @ Overtime                    1,140                           756 Total                    2,660                       2,436 Net Pay Calculation Withholding Allowance                         1                             2                                2 Gross Pay                 3,800                    2,660                       2,436 Deductions Social Security Tax 6%                    228                        160                           146 Medical tax rate 1.5%                       57                          40                             37 Withholding Allowance                       75                        150                           150 Total Allowance                    360                        350                           333 Taxable pay                 3,440                    2,311                       2,103 Fed tax @10% on taxablepay                    344                        231                           210 Net Pay                 3,096                    2,079                       1,893 Single: Taxable Income Tax Rate for 2015 $0 to $9,225 10% $9,226 to $37,450 $922.50 plus 15% of the amount over $9,225 $37,451 to $90,750 $5,156.25 plus 25% of the amount over $37,450 $90,751 to $189,300 $18,481.25 plus 28% of the amount over $90,750 $189,301 to $411,500 $46,075.25 plus 33% of the amount over $189,300 $411,501 to $413,200 $119,401.25 plus 35% of the amount over $411,500 $413,201 or more $119,996.25 plus 39.6% of the amount over $413,200

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