Question

An employee receives an hourly wage rate of $21, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows hours worked, 43; federal income tax withheld, $131; cumulative earnings for the year prior to this week, $24,157; social security tax rate, 6.0 % ; Medicare tax rate, 1.5% state unemployment compensation tax, 3.4 % on the first $7,000; and federal unemployment compensation tax, 0.8 % on the first $7,000. What is the net amount to be paid to the employee? Round your answer to the nearest cent. Oa. $1,354.50 Ob. 5701.91 Oc. 5934.50 Od. 5733.41

Answer 1

Hours worked = 43

Normal Hourly rate = $21

Normal weekly hours = 40

Overtime worked = 3 hours

Overtime rate = 21 x 1.5

= $31.5

Normal weekly pay = Normal weekly hours x Normal Hourly rate

= 40 x 21

= $840

Overtime pay = Overtime worked x Overtime rate

= 3 x 31.5

= $94.5

Total weekly pay = Normal weekly pay + Overtime pay

= 840 + 94.5

= $934.5

Social security tax rate = 6%

Social security tax = Total weekly pay x Social security tax rate

= 934.5 x 6%

= $56.07

Medicare tax rate = 1.5%

Medicare tax = Total weekly pay x Medicare tax rate

= 934.5 x 1.5%

= $14.02

Federal income tax withheld = $131

Net amount to be paid to employee = Total weekly pay - Social security tax - Medicare tax - Federal income tax withheld

= 934.5 - 56.07 - 14.02 - 131

= $733.41

Correct option is (D)

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