You have a full time job at a clothing store that pays a base rate of $13 per hour, with time-and-a-half for hours over forty in a week. You also earn a 2% commission on your total sales for the pay period. You are paid biweekly. You have determined that the withholding amount for Federal Income Tax will be $175 each pay period. Using a 6.2% rate for Social Security and a 1.45% rate for Medicare, determine your net pay for a period in which you had 10 overtime hours and $5000 in sales. *
To determine your net pay for the given period, follow these steps:
Step 1: Calculate your regular earnings.
- Multiply your base rate by the number of regular hours you worked (40 hours in a week).
- Calculate the base earnings: $13/hour * 40 hours = $520.
Step 2: Calculate your overtime earnings.
- Calculate your overtime rate, which is time-and-a-half your base rate: $13/hour * 1.5 = $19.5/hour.
- Multiply your overtime rate by the number of overtime hours worked (10 hours).
- Calculate the overtime earnings: $19.5/hour * 10 hours = $195.
Step 3: Calculate your commission earnings.
- Multiply your total sales for the pay period by the commission rate (2%).
- Calculate the commission earnings: $5000 * 2% = $100.
Step 4: Calculate your total earnings before deductions.
- Add your regular earnings, overtime earnings, and commission earnings.
- Calculate the total earnings: $520 + $195 + $100 = $815.
Step 5: Calculate your deductions.
- Calculate the Social Security deduction: 6.2% of your total earnings.
- Calculate the Medicare deduction: 1.45% of your total earnings.
- Calculate the federal income tax withholding amount: $175 (as given in the question).
- Calculate the total deductions: (6.2% + 1.45%) * $815 + $175 = $74.25 + $175 = $249.25.
Step 6: Calculate your net pay.
- Subtract the total deductions from your total earnings.
- Calculate the net pay: $815 - $249.25 = $565.75.
Therefore, your net pay for the given pay period, with 10 overtime hours and $5000 in sales, would be $565.75.