Betsy Strand’s regular hourly wage rate is $24, and she receives an hourly rate of $36 for work in excess of 40 hours. During a January pay period, Betsy works 45 hours. Betsy’s federal income tax withholding is $86, and she has no voluntary deductions. Compute Betsy Strand’s gross earnings and net pay for the pay period. Assume that the FICA tax rate is 7.65%.

Betsy’s gross earnings for January period is $1,140 Betsy’s net pay for January period is $966.79

Explanation:

Betsy Strand’s regular hourly wage rate = $24 Betsy Strand’s hourly rate for work in excess of 40 hours = $36 Betsy works during a January pay period = 45 hours. Betsy's pay for January period = $24 * 40 + $36 * 5 Betsy's pay for January period = $1,140

Betsy’s gross earnings for January period is $1,140

Betsy’s federal income tax withholding = $86 FICA tax rate  = 7.65%. Betsy’s FICA Taxes Payable = $1,140  * (7.65 / 100) Betsy’s FICA Taxes Payable = $87.21 Betsy’s net pay for January period = Gross earnings - Federal income tax withholding - FICA Taxes Betsy’s net pay for January period = $1,140 - $86 - $87.21 Betsy’s net pay for January period = $966.79

Betsy’s net pay for January period is $966.79

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