Payroll Calculations Homework: Michigan State Income Tax Analysis

This document presents a detailed solution to a payroll calculations homework assignment. The solution covers the calculation of gross pay, various tax deductions including Michigan State income tax, FICA, Medicare tax, and federal withholding tax for three different employees: Jacob Butler, Mary Smith, and Susan Green. Each employee's gross pay is calculated based on their hours worked and hourly rate, or overtime. The document then meticulously calculates each tax liability, including Social Security benefits tax where applicable, considering year-to-date (YTD) earnings and allowance amounts. Finally, the net pay for each employee is determined by subtracting all applicable taxes from the gross pay. The solution provides a clear breakdown of each step, demonstrating the process of calculating payroll deductions and arriving at the final net pay amount. This assignment is available on Desklib, a platform offering resources for students.

Jacob Butler
10/2/2017
VB-Homework 3
Bob Jones.
 Gross pay 38 hours x $14 = 532
 Michigan State income Tax. 4.25%. 532 x .0425 = 22.61
(FICA) Calculated Separately
1. Social Security Benefits Tax. YTD 126,800 + 532 = 127,332. $400 x .062 = 24.80
2. Medicare Tax. 1.45% of gross. $200,000 + an additional .9% for the access is taken in.
Medicare Tax. 532 x .0145 = 7.714
 Federal Withholding Tax. $67.31 x 2 allowances = 134.62 AWI, 532(gross) – 134.62(AWI) =
397.38 – 166= 231.38 * .10 = 23.138 + 0 = 23.138 Total Tax
 Net pay. Gross 532 – 22.61 -24.80 -7.714 -23.138 = 453.74 Net Pay rounded up
Mary Smith
 Gross pay 40 hours x 8.90 = 356
 Michigan State income Tax. 4.25%. 356 x .0425 = 15.13
(FICA) Calculated Separately
1. Social Security Benefits Tax. YTD 69,800 + $356=70,156 : 127,200-70156(YTD)=57,044
x .062 = 3536.728 356 *.062= 22.072
2. Medicare Tax. 1.45% of gross. $200,000 + an additional .9% for the access is taken in
Medicare Tax. 356 x .0145 = 5.162
 Federal Withholding Tax. $67.31 x 1 allowances = 67.31 AWI,356 (gross) – 67.31 (AWI) = 288.69 -
224 = 64.69 x .15 =9.7035 + 18 dollars= 27.7035 Total tax is 27.7035
 Net pay. Gross 356 -15.13 -22.072 -5.162 -27.7035 = 285.93 Net Pay rounded up
Susan Green
 Gross pay 40 hours x 27.55 = 1102. O/T 3.5 x 41.325 = 144.6375 = Total 1246.6375
 Michigan State income Tax. 4.25%. 1246.6375 x .0425 = 52.9820
(FICA) Calculated Separately
1. 1. Social Security Benefits Tax. YTD 201,560 Over $127200 gross (0) tax for social
security tax. Total tax is 0.
2. Medicare Tax. 1.45% + 1246.6375 = 8.0762, $200,000 – 201560 = 1560 * .009 = 14.04 +
18.07624375 =32.11624375 Medicare Tax
 Federal Withholding Tax. $67.31 x 3 allowances = 201.93 AWI, 1246.6375(gross) – 201.93(AWI) =
1044.7075 – 166 = 878.7075 x .15 = 87.87075 + 0.00 =87.87075 Total tax is 87.87075
 Net pay. Gross 1246.6375 -52.9820 -32.11624375 -87.870752 = 1073.67 Net Pay Rounded Up