Chapter 3, Problem 17PB

1.

To determine

Calculate the regular earnings for the weekly payroll ended December 13, 2019.

Explanation of Solution

Calculate the regular earnings for the weekly payroll ended December 13, 2019.

Step 1: Calculate the annual salary of Employee LR, Employee RB and Employee GL.

Employee	Monthly salary (A)	Annual salary (A×12months)
Employee JR	$7,280 per month	$87,360.00
Employee OJ	$5,265 per month	$63,180.00
Employee MK	$3,400 per month	$40,800.00

Table (1)

Step 2: Calculate the regular earnings of each employees.

Employee	Annual salary (A)	Regular Weekly earnings $\left(\frac{\text{A}}{\text{52}}\right)$
Employee WH	$99,840.00	$1,920.00
Employee PB	$96,200.00	$1,850.00
Employee JR	$87,360.00	$1,680.00
Employee OJ	$63,180.00	$1,215.00
Employee MK	$40,800.00	$784.62
Total	$387,380.00	$7,449.62

Table (2)

Thus, the total regular earnings for the weekly payroll ended December 13, 2019 is $7,449.62

2.

To determine

Calculate the overtime earnings if any applicable to any employee.

Explanation of Solution

Calculate the overtime earnings for Employee GL.

Employee	Weekly earnings (A)	Regular hourly rate (B)$\left(\frac{\text{A}}{40\text{Hours}}\right)$	Overtime hourly rate (C) $\left(\text{B}\times \text{1}\text{.5}\right)$	Overtime earnings (D) $\left(\text{C}\times 6\text{Hours}\right)$
Employee MK	$784.62	$19.62	$29.42	$176.54

Table (3)

Thus, the overtime earnings for Employee GL is $176.54.

3.

To determine

Calculate the total regular, overtime earnings and bonus.

Explanation of Solution

Calculate the total regular, overtime earnings and bonus.

Employee	Regular Weekly earnings	Overtime earnings	Annual bonus	Total earnings
Employee WH	$1,920.00	$0.00	$35,000	$36,920.00
Employee PB	$1,850.00	$0.00	$25,000	$26,850.00
Employee JR	$1,680.00	$0.00	$20,000	$21,680.00
Employee OJ	$1,215.00	$0.00	$15,000	$16,215.00
Employee MK	$784.62	$176.54	$8,000	$8,961.16
Total	$7,449.62	$176.54	$103,000	$110,626.16

Table (4)

Calculation for total regular, overtime earnings and bonus is as follows.

Table (5)

4 and 5.

To determine

Calculate the FICA taxable wages for this period and FICA taxes to be withheld for this period.

Explanation of Solution

Calculate the FICA taxable wages for this period and FICA taxes to be withheld for this period.

Cumulative earnings as of Last Pay Period	FICA Taxable Wages This Pay Period		FICA Taxes to be Withheld		Employees
	OASDI (A)	HI (B)	OASDI	HI
$94,080.00	$36,920.00	$36,920.00	$2,289.04	$535.34	Employee WH
$90,650.00	$26,850.00	$26,850.00	$1,664.70	$389.33	Employee PB
$82,332.00	$21,680.00	$21,680.00	$1,344.16	$314.36	Employee JR
$59,535.00	$16,215.00	$16,215.00	$1,005.33	$235.12	Employee OJ
$38,446.38	$8,961.16	$8,961.16	$555.59	$129.94	Employee MK
	$110,626.16	$110,626.16	$6,858.82	$1,604.08	Totals

Table (6)

Step 3: Calculate the employer’s portion of the FICA taxes for the week ended.

Calculate the OASDI taxes.

$\begin{array}{c}\text{Employer's portion of OASDI taxes}=\left(\text{Total OASDI earnings}\times \text{Tax rate}\right)\\ =\left(\$110,626.16\times \frac{6.20}{100}\right)\\ =\$6,858.82\end{array}$

Calculate the HI taxes.

$\begin{array}{c}\text{Employer's portion of HI taxes}=\left(\text{Total HI earnings}\times \text{Tax rate}\right)\\ =\left(\$110,626.16\times \frac{1.45}{100}\right)\\ =\$1,604.08\end{array}$

Calculate the total FICA taxes.

$\begin{array}{c}\text{Employer's portion of FICA taxes}=\left(\text{Total OASDI taxes}\times \text{Total HI taxes}\right)\\ =\left(\$6,858.16+\$1,604.08\right)\\ =\$8,462.24\end{array}$