An Employee Receives an Hourly Rate of $30, with Time

question 109

Multiple Choice

An employee receives an hourly rate of $30, 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, 48; federal income tax withheld, $300; cumulative earnings for year prior to current week, $90,700; 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) $1,032.00
• B) $1,143.00
• C) $1,053.60
• D) $1,166.40

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Definitions:

Compounded Annually

An interest calculation method where the interest is added to the principal at the end of each year, and future interest accrues on the new principal.

Accumulated

This term often refers to the total amount of something gathered over time, such as accumulated depreciation or accumulated earnings.

Liability

The financial liabilities or obligations that a company legally incurs in the course of conducting its business.

Savings Account

A deposit account held at a financial institution that provides principal security and a modest interest rate.