Calculations Employees Working Abroad and Aliens in the U.S.; Federal Wage Hours Laws; Taxable and Nontaxable Compensation; Health, Accident, and Retirement Benefits; Depositing and Reporting Withheld Taxes; Other Deductions from Pay

Problem # 1 A nonexempt employee receives an hourly wage of $13.50 for a 40-hour workweek. During one workweek, the employee worked 59 hours. The employee earned and was paid a nondiscretionary bonus of $250.00.. Calculate the employee’s total earnings for the workweek. Answer: $1,215.03 $13.50 x 59 = $796.50 + $250.00 = $1,046.50 59 – 40 = 19 overtime hours $1,046.50 / 59 = $17.74 $17.74 x .5 = $8.87 $8.87 x 19 = $168.53 $1,046.50 + $168.53 = $1,215.03

Problem # 2 An alien employee is present in the U.S. for 103 days during the current year, 105 days during the first preceding year, and 108 days during the second preceding year. How many days is the employee present in the U.S. under the substantial presence test? Answer: 156 days 103 + (105 / 3) + (108 / 6) 103 + 35 + 18 = 156

Problem # 3 Calculate the employee’s Medicare taxable wages from the following information. Gross Wages: $5,500.00 YTD Taxable Wages: $27,500.00 Cafeteria Plan Deductions: $175.00 401(k) deferral: $250.00 Answer: $5,325.00 $5,500.00 – $175.00 = $5,325.00

Problem # 4 An employee is to receive a year-end bonus of $50,000.00 The employer has agreed to pay all taxes on the bonus. The employee has been paid $155,000.00 year-to-date and the employee works in a state with no supplemental wage rate. Calculate the gross pay for this year-end bonus payment. Answer: $65,558.49 $200,000.00 - $155,000.00 = $45,000.00 $45,000.00 x .9% = $405.00 22% + 1.45% + .90% = 24.35% 100% – 24.35% = 75.65% ($50,000.00 - $405.00)/ 75.65% = $65,558.49 Proof: Taxes: $14,422.87 + $950.60 + $185.03* = $15,558.50 *(($155,000 + $65,558.49)-$200,000) x .9% $65,558.49 - $15,558.50 = $49,999.99

Problem # 5 Calculate the weekly imputed income on the group-term life insurance provided by the employer. The insurance coverage is 1 times the employee’s annual salary. The employee’s annual salary is $105,000 and will be 49 on December 31st. Answer: $1.90 $105,000.00 – $50,000.00 = $55,000.00 $55,000.00 / 1000 = $55.00 $55.00 x .15 = $8.25 (monthly) $8.25 x 12 = $99.00 (annual) $99.00 / 52 = $1.9038

Problem # 6 An employee is to receive a year-end bonus of $200,000.00 The employer has agreed to pay all taxes on the bonus. The employee has been paid $1,100,000.00 year-to-date in supplemental wages. Calculate the gross pay for this year-end bonus payment. Answer: $329,760.92 37% + 1.45% + .90% = 39.35% 100% – 39.35% = 60.65% $200,000.00 / 60.65% = $329,760.92 Proof: Taxes: $122,011.54 + $4,781.53 + $2,967.85 = $129,760.92 $329,760.92 - $129,760.92 = $200,000.00

Problem # 7 Calculate the employee’s federal income taxable wages from the following information. Gross Wages: $5,500.00 YTD Taxable Wages: $27,500.00 Cafeteria Plan Deductions: $175.00 401(k) deferral: $250.00 Garnishment: $750.00 Answer: $5,075.00 $5,500.00 – $175.00 - $250.00 = $5,075.00

Problem # 8 An employee is to receive a year-end bonus of $10,000.00 The employer has agreed to pay all taxes on the bonus. The employee has been paid $124,900.00 year-to-date and works in a state with no supplemental wage withholding rate. Calculate the gross pay for this year-end bonus payment. Answer: $13,346.83 $128,400.00 - $124,900.00 = $3,500.00 x 6.2% = $217.00 22% + 1.45% = 23.45% 100% – 23.45% = 76.55% ($10,000.00 + $217.00) / 76.55% = $13,346.83 Proof: Taxes: $2,936.30 + $217.00 + $193.53 = $3,346.83 $13,346.83 - $3,346.83 = $10,000.00

Problem # 9 An employee qualifies for the foreign housing cost exclusion under the physical presence test for all of 2017, spending $29,550 on reasonable housing expenses. Calculate the foreign housing cost exclusion for the employee. Answer: $12,926 $103,900 (foreign earned income exclusion) x .16 = $16,624 (base housing) $29,550 - $16,624 = $12,926

Problem # 10 An employee is to receive a year-end bonus of $15,000.00 The employer has agreed to pay all taxes on the bonus. The employee has been paid $95,000.00 year-to-date in supplemental wages and the state supplemental wage withholding rate is 4.5%. Calculate the gross pay for this year-end bonus payment. Answer: $22,779.04 22% + 4.5% + 6.2% + 1.45% = 34.15% 100% – 34.15% = 65.85% $15,000.00 / 65.85% = $22,779.04 Proof: Taxes: $5,011.39 + $1,025.06 + $1,412.30 + $330.30 = $7,779.05 $22,779.04 - $7,779.05 = $14,999.99

Problem # 11 Calculate the next day federal tax deposit from the following payroll tax information. Federal Income Tax Withheld: $44,925.78 State Income Tax Withheld: $7,290.00 Social Security Tax Withheld: $9,379.77 Medicare Tax Withheld: $2,509.62 Medicare Surtax Withheld: $101.76 Federal Unemployment Tax: $210.00 Answer: $68,806.32 $44,925.78 + $9,379.77 + $9,379.77 + $2,509.62 + $2,509.62 + $101.76 = $68,806.32

Problem # 12 An employee who earns $9.50 per hour is paid weekly and worked 40 hours in the workweek. The federal income tax withheld is $35.00 and the state income tax withheld is $10.00. The employee contributes $25.00 each pay to United Way. What is the employee’s disposable earnings? Answer: $305.93 $9.50 x 40 hours = $380.00 $380.00 x 6.2% = $23.56 $380.00 x 1.45% = $5.51 $35.00 + $10.00 +$23.56 +$5.51 = $74.07 $380.00 – $74.07 = $305.93