An Employee Receives an Hourly Rate of $27, with Time

question 20

Multiple Choice

An employee receives an hourly rate of $27, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the employee?

• A) $713.75
• B) $935.15
• C) $764.75
• D) $873.77

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Definitions:

Compliance Costs

Expenses incurred by businesses or individuals to adhere to laws, regulations, and standards.

U.S. Income Tax

A tax imposed by the U.S. government on the income earned by individuals, corporations, estates, and other entities.

Vertical Equity

The principle that people with higher incomes should pay more in taxes than those with lower incomes, reflecting a progressive tax system.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount on which the tax is imposed.