Calculate Payroll An employee earns $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. Round to two decimal places. $

A) 1,400

B) 1,055.85

Explanation:

An employee earns $25 per hour at 2 times the rate for all hours in excess of 40 hours per week

The employee works for 48 hours in that week

Social security tax rate is 6.0%

Medicare tax rate is 1.5%

Federal income tax= $239.15

(a) Gross pay= Regular pay+overtime

The regular pay can be calculated by multiplying the amount earned by the number of hours spent in the week

Regular pay= 40×25

= 1,000

The overtime can be calculated by multiplying the extra hours spent (48 hours-40 hours= 8 hours) by the amount earned and the rate

Overtime = 8× 25× 2

= 400

Gross pay= 1,000+400

= 1,400

(B) Net pay= Gross pay-Federal taxes withheld-Taxes payable

= 1,400-239.15-(6.0% of 1400-1.5% of 1,400)

= 1,400-239.15-84-21

= 1,055.85

Hence the gross pay is 1,400 and the net pay is 1,055.85

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