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Numerous Payroll-Related Concepts

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1. The pay period intervals biweekly and semimonthly are similar in that the same number of pay periods occur in either method.

2. A salaried employee is paid the same amount of money even though the hours worked may vary from pay period to pay period.

3. Carrie Blue earns a salary of $26,480.00 per year. If Carrie is paid biweekly, her gross paycheck would be $1,190.00.

4. An employee's overtime rate of pay is normally 1.2 times the regular hourly rate.

5. Gross wages = days worked × rate per hour.

6. The percent of social security tax charged and the amount of salary subject to the tax can change from year to year.

7. Employee contributions to medicare are limited on an annual basis.

8. Wages that are not taxable are referred to as "exempt wages."

9. If you receive paychecks 12 times a year at fixed intervals, you are probably being paid:
none of the above

10. If Kevin is paid an hourly rate of $18.90 and he earns one and one half times his regular rate for overtime, his overtime rate would be:
none of the above

11. A variable commission scale is normally based on:
gross sales
a different commission for different levels of sales
fixed commission rates
a fixed level of sales
none of the above

12. Patrick is an automobile salesman who receives a salary of $550.00 per week plus a commission of 5 percent on all sales. During a 4-week period he sold $49,500.00 worth of cars. What were Patrick's average earnings?
none of the above

13. Social security and medicare are:
calculated based upon the W-4 form
only paid by the employer
withheld from the employee's paycheck and matched by the employer
only paid by the employee
none of the above

14. The amount of federal income tax to be withheld from employee's paychecks can be calculated by:
either the percentage method or the wage-bracket table method
the percentage-bracket method
only by the percentage method
only by the wage-bracket method
none of the above

15. The withholding of 7.65% of the first $87,900 of earnings in a year includes:
medicaid tax
medicare tax
social security and medicare tax
social security tax
none of the above

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Solution Preview

1. False: There are 26 bi-weekly pay periods per year but 24 semi-monthly pay periods per year.
2. True: That is why executives are paid a salary.
3. False: $26,480/26 pay periods=$1018.46.
4. False: Overtime is paid at 1.5 times the base rate.
5. False: ...

Solution Summary

This solution discusses concepts regarding the computation of overtime, the definition of "exempt wages", the definition of a "salaried employee", the definition of monthly and bi-weekly payrolls, withholding computation methods, and the amount of FICA tax an employer remits to the Government.