Sally is the practice manager at Shiloh Veterinary Clinic. She earns $40 per hour, and is paid overtime after 40 hours in a single work week. The social security rate is 6% on the first $100,000 and the Medicare rate is 1.5% on all earnings. Prior to the current workweek, Sally had earnings totaling $99,400. If Sally worked 45 hours this week, and her estimated Federal income tax withholding is $450, how much will her net pay be?
Explanation
Answer: C- The net pay would be $1385.50, determined as follows: 40 hours x $40 = $1,600 and 5 hours (overtime) x $60 = $300. Total gross = $1900. The deductions are calculated as follows: Federal income tax ($450), Social Security ($600 x .06= $36), and Medicare ($1900 x 1.5% = $28.50). So the total amount of deductions, $514.50 is subtracted from the gross, $1900, for a total net pay of $1385.50
