27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Calculate payroll

An employee cams $25 per hour and 2 times that rate for all hours in excess of 40 hours per week, Assume that the employee worked 48 hours during the week. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and federal income tax to be withheld was $239.15.

  1. a. Determine the gross pay for the week.
  2. b. Determine the net pay for the week.


To determine

Gross pay: The total amount such as salary, wages, commissions, overtime, and bonus paid by the employer to an employee in each pay period is called as gross pay.

Net pay: It is the remaining amount of gross pay after all deductions.

To compute: Compute gross pay for the week.


Calculate Employee’s gross pay as below:

Particulars Amounts
Regular pay (1) $1,000
Overtime pay (2) $400
Gross pay $1,400

Table (1)

Working notes:

Calculate regular pay.

Regular pay = 40 hours ×$25 per hour=$1,000 (1)

Calculate overtime pay


To determine

To compute: Compute net pay for the week.

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