EX 11-9 Calculate payroll
Donohue Professional Services 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 $2,800 per week $30 per hour $42 per hour Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 3 2 1
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 from the wage bracket withholding table in Exhibit 3 in the chapter. Assume further that the social security tax rate was 6.0%, 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.
Answer:
Computer Consultant Programmer Administrator Regular earnings................................. $2,800.00 $1,200.00 $1,680.00 Overtime earnings............................... 900.00 840.00 Gross pay............................................. $2,800.00 $2,100.00 $2,520.00 Less: Social security tax.................... $ 168.001 $ 126.002 $ 151.203 Medicare tax.............................. 42.004 31.505 37.806 Federal income tax withheld.... 593.28 416.88 554.08 $ 803.28 $ 574.38 $ 743.08 Net pay................................................. $1,996.72 $1,525.62 $1,776.92 16.0% × $2,800 = $168.00 26.0% × $2,100 = $126.00 36.0% × $2,520 = $151.20 41.5% × $2,800 = $42.00 51.5% × $2,100 = $31.50 61.5% × $2,520 = $37.80
Withholding supporting calculations: Computer Consultant Programmer Administrator Gross weekly pay................................... $2,800.00 $2,100.00 $2,520.00 Number of withholding allowances...... 3 2 1 Multiplied by: Value of one allowance.. × $70.00 × $70.00 × $70.00 Amount to be deducted......................... $ 210.00 $ 140.00 $ 70.00 Amount subject to withholding............. $2,590.00 $1,960.00 $2,450.00 Initial withholding from wage bracket in Exhibit 3......................................... $ 340.44 $ 340.44 $ 340.44 Plus: Bracket percentage over bracket excess.................................. 252.847 76.448 213.649 Amount withheld.................................... $ 593.28 $ 416.88 $ 554.08
728% × ($2,590 – $1,687) 828% × ($1,960 – $1,687) 928% × ($2,450 – $1,687)
Consultant Computer Programmer Administrator Regular earnings rate $2,800 per week $30 per hour $42 per hour Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate Number of withholding allowances 3 2 1
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 from the wage bracket withholding table in Exhibit 3 in the chapter. Assume further that the social security tax rate was 6.0%, 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.
Answer:
Computer Consultant Programmer Administrator Regular earnings................................. $2,800.00 $1,200.00 $1,680.00 Overtime earnings............................... 900.00 840.00 Gross pay............................................. $2,800.00 $2,100.00 $2,520.00 Less: Social security tax.................... $ 168.001 $ 126.002 $ 151.203 Medicare tax.............................. 42.004 31.505 37.806 Federal income tax withheld.... 593.28 416.88 554.08 $ 803.28 $ 574.38 $ 743.08 Net pay................................................. $1,996.72 $1,525.62 $1,776.92 16.0% × $2,800 = $168.00 26.0% × $2,100 = $126.00 36.0% × $2,520 = $151.20 41.5% × $2,800 = $42.00 51.5% × $2,100 = $31.50 61.5% × $2,520 = $37.80
Withholding supporting calculations: Computer Consultant Programmer Administrator Gross weekly pay................................... $2,800.00 $2,100.00 $2,520.00 Number of withholding allowances...... 3 2 1 Multiplied by: Value of one allowance.. × $70.00 × $70.00 × $70.00 Amount to be deducted......................... $ 210.00 $ 140.00 $ 70.00 Amount subject to withholding............. $2,590.00 $1,960.00 $2,450.00 Initial withholding from wage bracket in Exhibit 3......................................... $ 340.44 $ 340.44 $ 340.44 Plus: Bracket percentage over bracket excess.................................. 252.847 76.448 213.649 Amount withheld.................................... $ 593.28 $ 416.88 $ 554.08
728% × ($2,590 – $1,687) 828% × ($1,960 – $1,687) 928% × ($2,450 – $1,687)
