During the first week of January, an employee works 45 hours. For this company, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $20 per hour, and her wages are subject to no deductions other than FICA Social Security, FICA Medicare, and federal income taxes. The tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $92 in federal income taxes withheld. What is the amount of this employee's gross pay for the first week of January?

Question

Business

Roman Parsons

10 December, 11:18

During the first week of January, an employee works 45 hours. For this company, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $20 per hour, and her wages are subject to no deductions other than FICA Social Security, FICA Medicare, and federal income taxes. The tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $92 in federal income taxes withheld. What is the amount of this employee's gross pay for the first week of January?

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Answers (1)

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Tanya Henson · Answer 1

Gross Wages = $950

Explanation:

The question is to determine the employee's gross pay for the first week of January as follows:

Description Amount

Regular wages (Regular hours 40 x $20) $800

Overtime wages $150

(Total hours - regular hours) x rate per hour

x pay rate

(45-40) x $20 x 150%

Gross Wages $950

However, not that if you are to calculate the net wages, social security which is Gross x 6.2%, Medicare which is Gross x 1.45% and Federal Income tax which is $92 withheld will be subtracted from the gross pay or wages.