# 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. a. Determine the gross pay for the week. b. Determine the net pay for the week.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 11, Problem 11.9EX
Textbook Problem

## Calculate payrollAn 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. a. Determine the gross pay for the week. b. Determine the net pay for the week.

Expert Solution

A.

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.

### Explanation of Solution

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

Expert Solution

B.

To determine

To compute: Compute net pay for the week.

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