Net Pay Calculation Solution - Accounting & Financial Management

This assignment provides a detailed solution to a net pay calculation problem involving Morgan Paisley, a single housekeeper in Nashville, Tennessee. The problem requires calculating Morgan's net pay based on an hourly wage of $14.50, with 52 total hours worked including 12 overtime hours. The ...Read More

Assignment on Accounting & Financial Management
According to the overtime law, one and one-half times their regular pay (hourly) should be paid
to the most employees for all hours worked after working of 40 hours in a given work week but
it should not be 8 hours a day("Tennessee Wage and Hour Laws - FindLaw", 2019).
Wage rate per hour $14.50
Total hours worked in a week 52 hours
Total hours worked as overtime 12 hours
Normal hours worked = (52-12) = 40 hours
Normal Wage = $14.50*40 = $580
Overtime Wage = $14.50*12*1.5 = $261
Total Wages Payable = $580+$261 = $841
Federal tax $58
Social Security Tax Rate is 6.20% and Medicare Tax Rate is 1.45% ("Taxation - Payroll", 2019).
So, Social Security Tax = $841*6.20% = $52.14
Medicare Tax = $841*1.45% = $12.1945 or $12.20
Net Pay = $841- ($58+$52.14+12.20) = $718.66
Federa
l
Social
Securit
y
Medicar
e
Employe
e
Married/
Single
% of
Withhol
d
Regula
r
Wages
OT
Wage
s
Tota
l
WH WH WH Net
Pay
Percentag
e of Taxes
Differ 6.20% 1.45%
Morgan
Paisley
Single $580 $261 $841 $58 $52.14 $12.20 $718.6
6
References
Taxation - Payroll. (2019). Retrieved from https://payroll.tennessee.edu/paymanual/taxation/

Tennessee Wage and Hour Laws - FindLaw. (2019). Retrieved from
https://statelaws.findlaw.com/tennessee-law/tennessee-wage-and-hour-laws.html