# E8-9 - a Reg Rate is \$40 Ovt Rate is(\$40.00 1.75 = \$70.00...

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Unformatted text preview: a) Reg Rate is \$40. Ovt Rate is (\$40.00 * 1.75) = \$70.00. So...(40hrs * \$40) + (20hrs * \$70) = \$3,000 Gross Pay. b) Since our prior gross pay was \$58k and current gross pay is \$3,000 this is still under the \$100k mentioned in the problem above. Therefore, we just need to tax 6% on the current gross pay amt. If the prior gross pay had been \$98k, then we would only need to tax 6% on the difference (\$100k - \$98k = \$2k * 6%) but that's not the case for this problem. Therefore... Social Sec. Tax = \$3,000 - 6% = \$180 Medicare Tax = \$3,000 - 1.5% = \$45 Federal Income Tax = \$714 So...\$3,000 - \$180 - \$45 - \$714 = \$2,061.00 is the net pay. Keep in mind we had to do a special calculation for Social Sec. because the "6.0% on earnings up to \$100,000" stipulation. Medicare was a straight fwd calculation and Federal Income tax was provided to us. ...
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