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Calculate Payroll K. Mello Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: Consultant Computer Programmer Administrator Regular earnings rate $2,810 per week $36 per hour $46 per hour Overtime earnings rate Not applicable 2 times hourly rate 1.5 times hourly rate Federal income tax withheld $930 $238 $515 For hourly employees, overtime is paid for hours worked in excess of 40 hours per week. For the current pay period, the computer programmer worked 55 hours and the administrator worked 65 hours. Assume further that the social security tax rate was 6%, and the Medicare tax rate was 1.5%. 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.

Sagot :

Answer:

1. Consultant's earning

Gross pay $2,810

Net pay $1,669.25

2. Computer Programmer

Gross pay $2,520

Net pay $2,093

3. Administrator Income

Gross pay $3,565

Net pay $2,782.62

Explanation:

Calculation to Determine the gross pay and the net pay for each of the three employees for the current pay period

1. Calculation for Consultant Income gross pay and Net pay

Consultant's earning = $2,810

Based on the information given Consultant's GROSS PAY will be $2,810

Calculation to determine the Net pay using this formula

NET PAY = Gross pay - Withheld tax - Medicare tax - social security tax

Let plug in the formula

Where,

Withheld tax = $930

Social security tax = 6% of Total earning

Social security tax= $2,810 * 6%

Social security tax= $168.6

Medicare tax = 1.5% of total earning

Medicare tax= $2,810 * 1.5%

Medicare tax = $42.15

Let plug in the formula

NET PAY = $2,810 - $930 - $42.15 - $168.6

NET PAY= $1,669.25

Therefore Consultant Income gross pay is $2,810 and Net pay is $1,669.25

2. Calculation to determine Computer Programmer gross pay and Net pay

Calculation for GROSS PAY

Rate of earning = $36 per Hour

Working Hours = 55 Hours

Computer programmer Earning = $36 * 55

Computer programmer Earning= $1,980

Overtime hours = 55 - 40

Overtime hours= 15 hours

Overtime earning = 2 times of hourly rate = 15* $36

Overtime earning= $540

GROSS PAY = $1,980+$540

GROSS PAY=$2,520

Calculation to determine the NET PAY

Using this formula

Net Pay = Gross pay - Withheld tax - Medicare tax - Social security tax

Where,

Withheld tax = $238

Social security tax = ($1,980+$540) * 6%

Social security tax= $2,520*6%

Social security tax=$151.2

Medicare tax = 1.5% of total earning

Medicare tax= $2,520 * 1.5%

Medicare tax = $37.8

Let plug in the formula

NET PAY = $2,520 - $238 - $37.8 - $151.2

NET PAY =$2,093

Therefore Computer Programmer Gross pay is $2,520 and the Net pay is $2,093

3. Calculation for Administrator Income Gross pay and Net pay

Calculation for GROSS PAY

Rate of earning = $46 per Hour

Working Hours = 65 Hours

Administrator Earning = $46 * 65

Administrator Earning= $2,990

Overtime hours = 65 - 40

Overtime hours= 25 hours

Overtime earning = 1.5 times of hourly rate = 25 * ($46/2) ( half of the rate is taken)

Overtime earning =25*23

Overtime earning =$575

GROSS PAY = $2,990+$575

GROSS PAY =$3,565

Calculation to determine the NET PAY

Using this formula

Net Pay = Gross pay - Withheld tax - Medicare tax - Social security tax

Where,

Withheld tax = $515

Social security tax = ($2,990+$575) * 6%

Social security tax= $3,565*6%

Social security tax=$213.9

Medicare tax = 1.5% of total earning

Medicare tax = $3,565 * 1.5%

Medicare tax =$53.48

Let plug in the formula

NET PAY = $3,565 - $515 - $53.48 - $213.9

NET PAY= $2,782.62

Therefore Administrator Income is Gross pay $3,565 and the Net pay is $2,782.62