alculate Payroll Breakin Away Company has three employees-a consultant, a comput

Question

alculate Payroll

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 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined by adding $356.90 to 28% of the difference between the employee's amount subject to withholding and $1,796.00. Assume further that the social security tax rate was 6%, the Medicare tax rate was 1.5%, and one withholding allowance is $70.

Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places.

Consultant Computer Programmer Administrator Regular earnings rate $2,710 per week $34 per hour $40 per hour Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 3 2 1

Explanation / Answer

Consultant:

Computer programmer:

Administrator:

Gross pay: 2710 Withholding allowance: Number of allowances 3 Amount of allowance 70 Total withholding allowance 210 -210 Amount subject to tax 2500 Federal tax withholding: Base tax 356.9 Employee amount subject to tax 2500 Less: -1796 Amount subject to 28% tax 704 Tax @ 28% 197.12 Total tax withholding 554.02 Gross pay 2710 Withholding: Social security tax @6% 162.6 Medicare tax@1.5% 40.65 Federal income tax 554.02 Total withholding 757.27 -757.27 Net pay 1952.73

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