Question

Tami Strand's regular hourly wage rate is $10, and she receives an hourly rate of $20 for work in excess of 40 hours. During a January pay period, Tami works 46 hours. Tami's federal income tax withholding is $92, and she has no voluntary deductions. Compute Tami Strand's gross earnings and net pay for the pay period. Assume that the FICA tax rate is 7.65%. (Round answers to 2 decimal places, e.g. 15.25.) Tami Strand's gross earnings $ Tami Strand's net pay "

Answer 1

Hours worked = 46

Normal working hours = 40

Overtime working hours = Hours worked - Normal working hours

= 46 - 40

= 6

Normal rate = $10 per hour

Overtime rate = $20 per hour

Tami Strand's gross earnings = Normal working hours x Normal rate + Overtime working hours x Overtime rate

= 40 x 10 + 6 x 20

= 400 + 120

= $520

FICA tax rate = 7.65%

FICA tax payable = Gross earnings x FICA tax rate

= 520 x 7.65%

= $39.78

Tami's federal income tax withholding = $92

Tami Strand's net pay = Tami Strand's gross earnings - Tami's federal income tax withholding - FICA tax payable

= 520 - 92 - 39.78

= $388.22

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