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# Gross Pay and Deductions

O'Connor works as a cook for a Steak 'n Shake diner. His straight-time pay is \$10 per hour, with time and a half for hours in excess of 40 hours a week. O'Connor's payroll deductions include withheld income tax of 7% of total earnings, FICA tax of 8% of total earnings, and a weekly deduction of \$5 for a charitable contribution to United Fund.

Assuming O'Conner worked 50 hours during the week, (a) compute his gross pay and net pay for the week and (b) make a general journal entry to record the store's wage expense for O'Conner's work, including payroll deductions. Explanations are not required.

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The total hours worked is 50. It is regular 40 and 10 overtime. Regular rate is \$10 per hour and overtime rate is \$15 per hour. The gross pay is ...

#### Solution Summary

The solution explains the calculation of gross pay with overtime and the related journal entry with deductions for FICA taxes and charitable contribution

\$2.19