An employee earns $40 per hour and 1.75 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 60 hours during the week, and that the gross pay prior to the current week totaled $58,000. Assume further that the social security tax rate was 6.0% (on earnings up to $100,000), the Medicare tax rate was 1.5%, and federal income tax to be withheld was $714.
The gross pay is $3000 don't know the net pay
To calculate the employee's gross pay for the week, we need to consider the regular pay for the first 40 hours and the overtime pay for the remaining hours.
Regular pay: The employee earns $40 per hour. Since the employee worked 60 hours this week, the regular pay for 40 hours is $40 * 40 = $1600.
Overtime pay: The employee earns 1.75 times the regular pay for all hours worked beyond 40 hours. Since the employee worked 60 hours in total, there are 60 - 40 = 20 hours of overtime. The overtime pay is $40 * 1.75 * 20 = $1400.
Therefore, the total gross pay for the week is $1600 (regular pay) + $1400 (overtime pay) = $3000.
Next, we need to calculate the deductions from the gross pay:
Social Security tax: The social security tax rate is 6.0% on earnings up to $100,000. Since the gross pay for the week is $3000, the social security tax is 6.0% * $3000 = $180.
Medicare tax: The Medicare tax rate is 1.5%. Therefore, the Medicare tax is 1.5% * $3000 = $45.
Federal income tax: The amount of federal income tax to be withheld is given as $714.
Therefore, the total deductions from the gross pay are $180 (social security tax) + $45 (Medicare tax) + $714 (federal income tax) = $939.
Finally, to calculate the net pay, we subtract the total deductions from the gross pay: $3000 (gross pay) - $939 (total deductions) = $2061.
Therefore, the employee's net pay for the week after deductions is $2061.