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Can anyone of you help me with this question:
A production operative is paid $ 11.00 per hour for basic 35 hour week.
Over time is paid 40% over the basic rate.
The operative worked for 38 hours in one week.
Income tax dedeucted was $ 76.40 and benefit contribution payments were:???? employer : $40
???? employee : 10% of gross payWhat was the net pay of the operative in that week?
Remember this:
Gross Pay is ‘calculated’ pay.
Net Pay is pay actually given to the employees.
Also, NP < GP as a rule, as the employee’ contributions (pension, income tax etc) are deducted from GP to give NP.Basic Pay (38 hours) = 38*11 = 418
Overtime Premium (3 hours) = 3*0.4*11 = 13.2
Total Pay (GP) = 418 + 13.2 = 431.2Simply deduct everything contributed/paid by EMPLOYEE
aka
GP – income tax – Employee’s contributions
= 431.2 – 76.4 – 0.1*431.2 = $311.68And also, the labour cost for the EMPLOYER is always greater than GP as it INCLUDES any of the contributions of the employer.
So NP < GP < Labour Cost (to employer)For this, add the employer’s contributions to GP
Labour Cost = 431.2 + 40 = $471.2
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