### Payroll Calculation Example**Employee Profile:**- **Name:** Jaflin Garza- **Marital Status:** Married- **Withholding Allowances:** Three- **Voluntary Deduction:** $34.00 per week for group hospitalization insurance**Wage Information:**- **Regular Hourly Wage Rate:** $34.00- **Overtime Rate:** 1.5 times the regular hourly rate for work exceeding 40 hours/week**Work Hours and Earnings:**- **Weekly Hours Worked (March pay period):** 43 hours- **Gross Earnings Prior to Current Week:** $6,000### Detailed Earnings Calculation:**Regular Hours:**- Worked 40 hours at a rate of $34/hour- **Regular Earnings:** 40 hours * $34/hour = $1,360**Overtime Hours:**- Worked 3 overtime hours (43 total hours - 40 regular hours)- Overtime rate: 1.5 * $34/hour = $51/hour- **Overtime Earnings:** 3 hours * $51/hour = $153**Total Earnings for the Week:**- **Gross Earnings:** $1,360 (regular) + $153 (overtime) = $1,513### Deductions:- **Voluntary Deduction:** - Group hospitalization insurance: $34.00/week### Example of Gross and Net Earnings- **Gross Earnings (Current Week):** $1,513- **Total Deductions:** $34 (hospitalization insurance)- **Net Earnings:** $1,513 - $34 = $1,479### Summary:For the specified March weekly pay period, Jaflin Garza worked a total of 43 hours, earning $1,513 before any deductions. After deducting $34 for group hospitalization insurance, her net earnings for the week amounted to $1,479. **How to Compute Jaflin’s Wages for the Current Week**When calculating an employee's wages, it’s essential to consider various deductions and taxes to determine the net pay. Below are the steps and computations needed to derive the net pay for Jaflin's earnings for the current week:1. **Gross Earnings** - This is the total amount before any deductions. Enter the amount in the provided space. \[ \text{Gross Earnings: } \quad \$\_\_\_\_\_ \]2. **FICA Taxes** - FICA taxes (Federal Insurance Contributions Act) are composed of Social Security and Medicare taxes. - The rate is 7.65% on a maximum of $132,900 for the year. \[ \text{FICA Taxes: } \quad 0.0765 \times \text{Gross Earnings} = \$\_\_\_\_\_ \]3. **Federal Income Taxes Withheld** - This amount is based on Jaflin's taxable income, which depends on their filing status and allowances. Enter the appropriate amount in the space provided. \[ \text{Federal Income Taxes Withheld: } \quad \$\_\_\_\_\_ \]4. **State Income Taxes Withheld** - Assume a state income tax rate of 3.0%. \[ \text{State Income Taxes Withheld: } \quad 0.03 \times \text{Gross Earnings} = \$\_\_\_\_\_ \]5. **Net Pay** - This is the amount Jaflin takes home after all deductions. \[ \text{Net Pay: } \quad \text{Gross Earnings} - (\text{FICA Taxes} + \text{Federal Income Taxes Withheld} + \text{State Income Taxes Withheld}) = \$\_\_\_\_\_ \]**Important Note:**Make sure to round all calculated answers to 2 decimal places.---This guide helps ensure precise computations of wages while being compliant with federal and state tax regulations.

Given information, Hourly wage rate =$34 Total hours worked=43 hours (1) Gross earnings:…

Answered: Jaflin Garza's regular hourly wage rate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transcribed Image Text:### Payroll Calculation Example **Employee Profile:** - **Name:** Jaflin Garza - **Marital Status:** Married - **Withholding Allowances:** Three - **Voluntary Deduction:** $34.00 per week for group hospitalization insurance **Wage Information:** - **Regular Hourly Wage Rate:** $34.00 - **Overtime Rate:** 1.5 times the regular hourly rate for work exceeding 40 hours/week **Work Hours and Earnings:** - **Weekly Hours Worked (March pay period):** 43 hours - **Gross Earnings Prior to Current Week:** $6,000 ### Detailed Earnings Calculation: **Regular Hours:** - Worked 40 hours at a rate of $34/hour - **Regular Earnings:** 40 hours * $34/hour = $1,360 **Overtime Hours:** - Worked 3 overtime hours (43 total hours - 40 regular hours) - Overtime rate: 1.5 * $34/hour = $51/hour - **Overtime Earnings:** 3 hours * $51/hour = $153 **Total Earnings for the Week:** - **Gross Earnings:** $1,360 (regular) + $153 (overtime) = $1,513 ### Deductions: - **Voluntary Deduction:** - Group hospitalization insurance: $34.00/week ### Example of Gross and Net Earnings - **Gross Earnings (Current Week):** $1,513 - **Total Deductions:** $34 (hospitalization insurance) - **Net Earnings:** $1,513 - $34 = $1,479 ### Summary: For the specified March weekly pay period, Jaflin Garza worked a total of 43 hours, earning $1,513 before any deductions. After deducting $34 for group hospitalization insurance, her net earnings for the week amounted to $1,479.

**How to Compute Jaflin’s Wages for the Current Week**

When calculating an employee's wages, it’s essential to consider various deductions and taxes to determine the net pay. Below are the steps and computations needed to derive the net pay for Jaflin's earnings for the current week:

1. **Gross Earnings**
- This is the total amount before any deductions. Enter the amount in the provided space.
\[
\text{Gross Earnings: } \quad \$\_\_\_\_\_
\]

2. **FICA Taxes**
- FICA taxes (Federal Insurance Contributions Act) are composed of Social Security and Medicare taxes.
- The rate is 7.65% on a maximum of $132,900 for the year.
\[
\text{FICA Taxes: } \quad 0.0765 \times \text{Gross Earnings} = \$\_\_\_\_\_
\]

3. **Federal Income Taxes Withheld**
- This amount is based on Jaflin's taxable income, which depends on their filing status and allowances. Enter the appropriate amount in the space provided.
\[
\text{Federal Income Taxes Withheld: } \quad \$\_\_\_\_\_
\]

4. **State Income Taxes Withheld**
- Assume a state income tax rate of 3.0%.
\[
\text{State Income Taxes Withheld: } \quad 0.03 \times \text{Gross Earnings} = \$\_\_\_\_\_
\]

5. **Net Pay**
- This is the amount Jaflin takes home after all deductions.
\[
\text{Net Pay: } \quad \text{Gross Earnings} - (\text{FICA Taxes} + \text{Federal Income Taxes Withheld} + \text{State Income Taxes Withheld}) = \$\_\_\_\_\_
\]

**Important Note:**
Make sure to round all calculated answers to 2 decimal places.

---

This guide helps ensure precise computations of wages while being compliant with federal and state tax regulations.

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