5. Retirement plans Psb 3-2 Calculate Gross Pay and Taxable Pay For each employee, first calculate gross pay. Then determine taxable income used to calculate federal income tax withholding, Social Security tax, and Medicare tax. 1. An employee works 42 hours (two were overtime hours) during a workweek in December of 2020. He earns $40.50/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $137,100 during the year. He has requested that his employer withhold 7% of gross pay to contribute to a 403(b) plan. 2. An employee works 37 regular hours during a workweek in August of 2020. He was hired four years ago, earns a salary of $135,100/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay to contribute to a 401(k) plan. 3. An employee works 50 hours (10 of which were overtime hours) during a workweek in December of 2020. He earns $9,500/month, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $114,500 during the year. He has requested that his employer withhold 13% of gross pay to contribute to a 403(b) plan