Hernandez Builders has a gross payroll for January amounting to $500,000. The following amounts have been withheld: Federal income taxes $63,000 Social Security 31,000 Medicare 7,250 Charitable contributions 1% of gross pay Union dues 2% of gross pay Also, the federal unemployment tax rate is 6.2% and applies to all but $50,000 of the gross payroll. Required: 1. What is the amount of net pay recorded by Hernandez

Question

Business

Zaiden Hamilton

3 June, 06:07

Hernandez Builders has a gross payroll for January amounting to $500,000. The following amounts have been withheld: Federal income taxes $63,000 Social Security 31,000 Medicare 7,250 Charitable contributions 1% of gross pay Union dues 2% of gross pay Also, the federal unemployment tax rate is 6.2% and applies to all but $50,000 of the gross payroll. Required: 1. What is the amount of net pay recorded by Hernandez

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Yasmine · Answer 1

Net pay is $383,750

Explanation:

Hermandez builders net pay can be computed by deducting the following from the gross payroll amount:

Federal income taxes

social security

medicare

charitable contributions

union dues

The net pay is computed thus:

Gross payroll pay $500,000

Federal income taxes $63,000

Social security $31,000

medicare $7,250

charitable contributions (1%*$500000) $5,000

union dues (2%*$500000) $10,000

($116,250)

Net pay $383,750