EXERCISE 7-2 Lisa Meilo works for Pacific Company, which pays its employees time

Question

EXERCISE 7-2 Lisa Meilo works for Pacific Company, which pays its employees time-and-a-half for all hours worked in excess of 40 per week. Meilos pay rate is $37 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 8 ½-hour day. In the most recent pay period, she worked 50 hours. Meilos beginning cumulative carnings are $73,654. Complete the following: a. b. c. Total gross pay d. Federal income tax withholding e. Social Security tax withholding at 6.2 percent f. Medicare tax withholding at 1.45 percent g. Total withholding h. Net pay hours at straight time X$per hour hours overtime × $ per hour $254.66

Explanation / Answer

in $ a) 40 hours straight time*$37 1480 b) 10 hours overtime $55.5 555 Total gross pay 2035 Federal income tax withhelding 254.66 Social security taxes (2035*6.2) 126.17 Medicare tax (2035*1.45%) 29.51 Total withholding 410.34 Net Pay 1624.66

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