In addition to the regular salaries the company pays an annual bonus based on the amount of earnings for the year. For the current year the bonus amounts to 8% of the annual salary paid to each employee. The bonus is to be paid along with the regular salaries on December 24, but the amount of the bonus and the amount of the regular salary will be shown separately on each employee's earnings statement. Assume that all employees received their regular salary during the entire year.
Prepare the payroll for the pay period ending December 24, showing the
following for each employee. Use the wage-bracket method to withhold
federal income tax from the regular salaries. Withhold a flat 25% on the
annual bonus. Total salaries and bonuses are subject to a 2% state
income tax and a 1% city income tax.
Click here for the solution: 4-8A The names of the employees of Cox Security Systems and their regular salaries are shown in the following payroll register
