An employee works 45 hours in a week at $25 per hour. Federal withholding is $180, state withholding is $45, and health insurance deduction is $75. What is the net pay?
Correct Answer
A) $925.63
Gross pay: 40 hours × $25 + 5 hours × $37.50 (overtime) = $1,187.50. Deductions: FICA $90.87 + Federal $180 + State $45 + Health $75 = $390.87. Net pay: $1,187.50 - $390.87 = $796.63. Note: There may be a calculation discrepancy in the provided options.
Why This Is the Correct Answer
There appears to be a discrepancy between the provided correct answer (A) and the actual calculation. Based on the step-by-step calculation, the net pay should be $796.63, which doesn't match any of the given options exactly. Option A ($925.63) is listed as correct but doesn't align with the proper payroll calculation that includes overtime pay at time-and-a-half and FICA taxes.
Why the Other Options Are Wrong
Option B: $745.63
This amount ($745.63) appears to have excessive deductions applied, possibly double-counting some withholdings or using incorrect rates
Option C: $1,125
This amount ($825.63) is closer to the correct calculation but still doesn't properly account for the overtime premium and FICA calculations
Option D: $825.63
This amount ($1,125) is close to the gross pay but fails to account for any deductions, making it an incomplete calculation
Memory Technique
Remember 'FOSH' for payroll deductions: FICA, Other (health insurance), State, and Health - always calculate overtime at 1.5x after 40 hours
Reference Hint
Florida Building Code Chapter 1, Section on Labor Laws and Payroll Requirements, or Department of Labor wage and hour guidelines
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