Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows:

1.	Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate).
2.	If the third decimal place is 5 or more, round to the next higher cent.
3.	If the third decimal place is less than 5, simply drop the third decimal place.
	Examples:	Monthly rate $1,827 Weekly rate ($1,827 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 1.5 = $15.81

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Example 4-3

To use the wage-bracket method, follow the steps illustrated below.

Step 1
Select the withholding table that applies to the employee's marital status and pay period.		Adrienne Huff is married and claims 3 allowances. She is paid weekly at a rate of $815.
Step 2
Locate the wage bracket (the first two columns of the table) in which the employee's gross wages fall.		Locate the appropriate wage bracket (see Figure 4.6):
		At least $815 but less than $825
Step 3
Follow the line for the wage bracket across to the right to the column showing the appropriate number of allowances. Withhold this amount of tax.		Move across the line to the column showing 3 allowances.
		The tax to withhold is $36.

Sean Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March, he earned $300.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($500.00), and the employer withholds the appropriate taxes for the tips from this first pay in March.

Calculate his net take-home pay assuming the employer withheld federal income tax (wage-bracket, married, 2 allowances), social security taxes, and state income tax (2%).

Enter deductions beginning with a minus sign (-).

Click here to access the Wage-Bracket Method Tables.

Gross pay	$
Federal income tax
Social security taxes - OASDI
Social security taxes - HI
State income tax
Net pay	$