Question

Logan White is general manager of Valuepoint Salons. During 2018, White worked Valuepoint incurred payroll tax expense on White for FICA tax. The company also for the company all year at a $13,600 monthly salary. He also earned a year-end paid state unemployment tax and federal unemployment tax. bonus equal to 15% of his annual salary. White's federal income tax withheld (Click the icon to view payroll tax rate information.) during 2018 was $1,360 per month, plus $4,876 on his bonus check. State income tax withheld came to $150 per month, plus $60 on the bonus. FICA tax was Read the requirements. withheld on the annual earnings. White authorized the following payroll deductions: Charity Fund contribution of 1% of total earnings and life insurance of $40 per month. Requirement 1. Compute White's gross pay, payroll deductions, and net pay for the full year 2018. Round all amounts to the nearest dollar. Begin by computing White's gross pay for the year. (Round all amounts to the nearest dollar.) Gross pay: Gross Pay

Answer 1

Particulars	Amount	Amount
Gross pay:
Salaries		$ 163,200
Bonus		$   24,480
Total gross pay		$ 187,680
Witholding deductions
Federal income tax	$ 21,196
State income tax	$    1,860
FICA-OASDI tax	$    7,347
FICA-medicare tax	$    2,721
Charity fund	$    1,877
Life insurance	$       480
Total withholding deductions		$   35,481
Net pay (take home)		$ 152,199

Annual salaries = Monthly salaries x12 = $13.600 x12 = $163,200 Calculate bonus Bonus = Monthly salaries x12x15% = $13,600 x12x15% = $24.480 Calculate federal income tax Federal income tax = ($1,360 x12) +S4,876 = $21.196 Calculate state income tax State income tax = ($150 x12) +S60 = $1,860 Calculate FICA (Federal Insurance Contributions Act) - OASDI Disability Insurance) tax FICA-OASDI tax = 6.2% of first 118,500 =6.2%<$118,500 = $7,347