An employee’s rate of pay is $40 per hour, with time and a half for all hours worked in excess of 40 during a week. The social security rate is 6.0%

on the first $100,000 of annual earnings, and the Medicare rate is 1.5% on all earnings. The follow¬ ing additional data are available:

Hours worked during current week 45 Year's cumulative earnings prior to current week $99,400 Federal income tax withheld $450 Based on these data, the amount of the employee’s net pay for the current week is:

A. $1,307.50 C. $1,450.00 B. $1,405.00 D. $1,385.50 5.Within limitations on the maximum earnings sub¬ ject to the tax, employers do not incur an expense for which of the following payroll taxes?

A. Social security tax B. Federal unemployment compensation tax C. State unemployment compensation tax D. Employees’ federal income tax AppendixLO1