Exam 7: Payroll and Income Tax

Calculate the net pay. The balance before this weekly payroll is $90 below maximum as related to cumulative earnings in calculating Social Security. Assume a tax rate of 6.2% for Social Security on $110,100 and 1.45% for Medicare:

The Labor Fair Standards Act:

Bill Burne's earnings are subject to deductions for Social Security, Medicare, and FIT. To date his cumulative earnings are $110,000. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims three exemptions. Assume the Social Security rate is 6.2% on $110,100 and 1.45% for Medicare. His net pay for the week is:

Gross pay = hours worked * rate per hour.

Exempt wages means not taxable wages.

An override can never help increase a manager's total pay.

Ron Swift earned $1,500 last week. He is married, is paid biweekly, and claims two exemptions. Using the percentage method, his income tax is:

An employee's commission is always based on total dollar sales.

John, who is married with two dependents, has total income of $110,000. Itemized deductions total $46,000. John paid $6,000 into an IRA for both his wife and himself this year. John will file a joint return with his wife. What is John's Taxable Income?

A calendar year is July 1 to June 30.

Aley Company pays all its employees a graduated commission scale: 3% on the first $30,000 sales, 5% on sales from $30,001 to $110,000, and 7% on sales more than $110,000. Jim Jones, an employee of Aley, had $130,000 in sales. What commission did Jim earn?

The more allowances claimed on Form W-4:

Being paid biweekly means the salary is paid twice a month.

The number of dependents one claims does not affect the amount of Social Security and Medicare tax paid.

SUTA tax is usually paid quarterly.

Calculate the gross pay for Ryan Campbell, an apple picker, based on the following differential scale. Ryan picked 7,250 apples during this pay period. 1-1,000 = $.06 1,000-2,000 = $.08 2,000--4,000 = $.10 Over 4,000 = $.12

FICA stands for federal withholding tax.

Barry Katz earned $990 per week. He is married and claims three allowances. What is his federal income tax? (Use the percentage method.)

Robin Small pays her three workers $180, $450, and $615, respectively, per week. Calculate what Robin will pay at the end of the first quarter for (A) state unemployment and (B) federal unemployment. Assume a state rate of 5.7%. Federal is .8%. Base is $7,000.

Circular E from the Internal Revenue Service contains many tax tables.