Payroll Processing and Tax Withholding Worksheet ACC $201$ For each of the scenarios below, complete the following steps: Calculate the employee's gross pay. Use the provided tax withholding table or percentages to compute tax withholding. Subtract taxes and deductions to determine net pay. Record the appropriate journal entry to account for payroll and employer tax obligations. PLEASE SHOW YOUR CALCULATIONS SAMPLE Jordan worked $45$ hours this week at $$16/$hour$.$ He is paid time$-$and$-$a$-$half for overtime. Federal income tax is $12\%,$ Social Security is $6\mathrm{.}2\%,$ and Medicare is $1\mathrm{.}45\%.$ He has no other deductions. Calculate gross pay: Regular pay $=40$ hrs x $$16=$ $$640$ Overtime pay $=5$ brs x $($$$161\mathrm{.}5)=5$ x $$24=$ $$120$ Total Gross Pay $=$ $$640+$ $$120=$ $$760$ Calculate total tax withholding: Federal income tax $=$ $$76012\%=$ $$91\mathrm{.}20$ Social Security $=$ $$7606\mathrm{.}2\%=$ $$47\mathrm{.}12$ Medicare $=$ $$7601\mathrm{.}45\%=$ $$11\mathrm{.}02$ Total Withholding $=$ $$91\mathrm{.}20+$ $$47\mathrm{.}12+$ $$11\mathrm{.}02=$ $$149\mathrm{.}34$ Other deductions: None Calculate net pay: Net Pay $=$ $$760-$ $$149\mathrm{.}34=$ $$610\mathrm{.}66$ Journal Entry for Payroll: Debit: Wages Expense $$760$ Credit: Employee Tax Payable $$149\mathrm{.}34,$ Cash $$610\mathrm{.}66$ Journal Entry for Employer Payroll Taxes: Debit: Payroll Tax Expense $$58\mathrm{.}14$ Credit: Social Security Payable $$47\mathrm{.}12,$ Medicare Payable $$11\mathrm{.}021.$ Hourly Employee Maria worked $42$ hours this week at $$20/$hour$.$ She receives time$-$and$-$a$-$half for overtime. Federal income tax is $10\%,$ Social Security is $6\mathrm{.}2\%,$ and Medicare is $1\mathrm{.}45\%.$ No other deductions apply. Calculate gross pay: Calculate total tax withholding: List other deductions: Calculate net pay: Record journal entry for payroll: o Debit: $-$ o Credit: Record journal entry for employer payroll taxes: Debit: $\_$ Credit: $2.$ Salaried Employee with Bonus James earns a salary of $$1,000$ per week and received a $$300$ performance bonus. Federal income tax is $12\%,$ Social Security is $6\mathrm{.}2\%,$ and Medicare is $1\mathrm{.}45\%.$ He contributes $$50$ to a retirement plan. Calculate gross pay: $-$ Calculate total tax withholding: List other deductions: Calculate net pay: $-$ Record journal entry for payroll: o Debit: $\_$ Credit: Record journal entry for employer payroll taxes: Debit: Credit: $3.$ Hourly Employee with Pre$-$tax Deduction Chloe worked $35$ hours at $$18/$hour$.$ She contributes $$40$ pre$-$tax to a health insurance plan. Federal tax is $10\%,$ Social Security is $6\mathrm{.}2\%,$ Medicare is $1\mathrm{.}45\%.$ Calculate gross pay: $-$ Calculate total tax withholding: List other deductions: Calculate net pay: $$ Record journal entry for payroll: Debit:$\_$ Credit: Record journal entry for employer payroll taxes: Debit: $\_$ Credit: $4.$ Overtime Only David earns $$22/$hour and worked $10$ hours of overtime $($no regular hours this week$).$ Overtime is paid at $1\mathrm{.}5$x rate. Federal tax is $12\%,$ Social Security $6\mathrm{.}2\%,$ Medicare $1\mathrm{.}45\%.$ Calculate gross pay: Calculate total tax withholding: List other deductions: Calculate net pay: Record journal entry for payroll: Debit: Credit: Record journal entry for employer payroll taxes: Debit: Credit: $5.$ Commission$-$Based Pay Sasha earned $$1,200$ in commissions this week. There is no base pay. Federal tax is $15\%,$ Social Security $6\mathrm{.}2\%,$ Medicare $1\mathrm{.}45\%.$ She also pays union dues of $$25.$ Calculate gross pay: Calculate total tax withholding: List other deductions: Calculate net pay: Record journal entry for payroll: Debit: Credit: Record journal entry for employer payroll taxes: Debit: Credit: $6.$ Mixed Pay Leo earns $$700$ in base pay and $$400$ in commissions. Federal tax is $12\%,$ Social Security $6\mathrm{.}2\%,$ Medicare $1\mathrm{.}45\%.$ He contributes $$60$ pre$-$tax to a $401($k$).$ Calculate gross pay: Calculate total tax withholding: List other deductions: $$ Calculate net pay: $$ Record journal entry for payroll: Debit: Credit: Record journal entry for employer payroll taxes: Debit: Credit: $7.$ New Hire Emily just started and worked $30$ hours at $$15/$hour$.$ She has no deductions beyond taxes. Federal tax is $10\%,$ Social Security $6\mathrm{.}2\%,$ Medicare $1\mathrm{.}45\%.$ Calculate gross pay: Calculate total tax withholding: $-$ List other deductions: Calculate net pay: Record journal entry for payroll: Debit: Credit: Record journal entry for employer payroll taxes: Debit: Credit: $8.$ Biweekly Paycheck Derek earns a biweekly salary of $$2,000.$ His deductions include $$100$ to a retirement plan and $$75$ to health insurance. Federal tax is $15\%,$ Social Security $6\mathrm{.}2\%,$ Medicare $1\mathrm{.}45\%.$ Calculate gross pay: Calculate total tax withholding: List other deductions: Calculate net pay: Record journal entry for payroll: Debit: Credit: Record journal entry for employer payroll taxes: Debit: Credit: