Frances Newberry is the payroll accountant for Pack-It Services of Jackson, Ariz

Question

Frances Newberry is the payroll accountant for Pack-It Services of Jackson, Arizona. The employees of Pack-it Services are paid semimonthly. An employee, Glen Riley, comes to her on November 10 and requests a pay advance of $1,700, which he will pay back in equal parts on the November 15 and December 15 paychecks. Glen is married with eight withholding allowances and is paid $59,120 per year. He contributes 3% of his pay to a 401(k) and has $25 per paycheck deducted for a Section 125 plan. Compute his net pay on his November 15 paycheck. The state income tax rate is 4%. Use the Wage Bracket Method Tables for Income Tax Withholding in

Explanation / Answer

Calculation Amount Gross Pay X 2,886.15 Social Security Tax 6.2% 0.062x     -178.94 Medicare 1.45% 0.0145x       -41.85 401(k) 3% 0.03x       -86.58 State Tax 4% 0.04x     -115.45 125 Plan       -25.00 2,438.33 Less Installment     -850.00 Net Pay 1,588.33

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