Question

alculate Payroll Consultant Administrator $48 per hour 2 times hourly rate 1 Breakin Away Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee: Computer Programmer Regular earnings rate $2,210 per week $30 per hour Overtime earnings rate Not applicable 1.5 times hourly rate Number of withholding allowances 3 2 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 Gross pay Net pay

Answer 1

Particulars	Consultant	Comp. Programmer	Administrator
Gross Pay	$                2,210.00	$                2,100.00	$                2,880.00
Less:
Social Security tax 6%	$                   132.60	$                   126.00	$                   172.80
Medicare tax 1.5%	$                     33.15	$                     31.50	$                     43.20
Icome tax withheld( wn)	$                   560.90	$                   520.90	$                1,370.90
Net Pay	$                1,483.35	$                1,421.60	$                1,293.10
Working Note:
Particulars	Consultant	Comp. Programmer	Administrator
Gross Pay(a)	$                2,210.00	$                2,100.00	$                2,880.00
Withholding Allowance(b)	3	2	1
Value of One Withholding©	$                     70.00	$                     70.00	$                     70.00
Exempted Amount(d=b*c)	$                   210.00	$                   140.00	$                     70.00
Amount subject to withholding(e=a-d)	$                2,000.00	$                1,960.00	$                2,810.00
Base Tax(f)	$                   356.90	$                   356.90	$                   356.90
Excess Income Over$ 1,796.00(g= e-1796)	$                   204.00	$                   164.00	$                1,014.00
Amount Withheld(f+g)	$                   560.90	$                   520.90	$                1,370.90

A B с D 1 Consultant 2210 Comp. Programmer Administrator =(30*40)+30*1.5*20 =48*40+2*48*10 2 Particulars 3 Gross Pay 4 Less: 5 Social Security tax 6% 6 Medicare tax 1.5% 7 Icome tax withheld( wn) =B3*6% =B3*1.5% =B20 =C3*6% =C3*1.5% =C20 =D3*6% =D3*1.5% =D20 =C3-C5-C6-C7 =D3-D5-D6-07 8 Net Pay =B3-B5-B6-B7 9 10 11 Working Note: 12 Particulars Consultant 13 Gross Pay(a) 2210 14 Withholding Allowance(b) 3 15 Value of One Withholding 70 16 Exempted Amount(d=b*c) =B14*B15 17 Amount subject to withholding(e=a-d) =B13-B16 18 Base Tax(f) 356.9 19 Excess Income Over$ 1,796.00(g=e-1796) =B17-1796 20 Amount Withheld(f+g) =B18+B19 Comp. Programmer Administrator =(30*40)+30*1.5*20 =48*40+2*48*10 2 1 70 70 C14*C15 =D14*D15 =C13-C16 =D13-D16 356.9 356.9 =C17-1796 =D17-1796 =C18+C19 =D18+D19