Reference no: EM132565241

Topic - Payroll

Part a - An employee earns $40 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 60 hours during the week and that the gross pay prior to the current week totaled $58,000. Assume further that the social security tax rate was 6.0%, the Medicare tax rate was 1.5%, and the federal income tax to be withheld was $614.

(a) Determine the gross pay for the week.

(b) Determine the net pay for the week.

Part b - Payroll fraud is the theft of cash from a business via the payroll processing system. There are several ways in which employees can commit payroll fraud.

i) Identify a fraud scheme where fictitious details of employees are created by payroll clerk for personal gain.

ii) Discuss two ways of mitigating the fraud scheme identified above.

iii) Explain the importance of filing and confidentiality of payroll information.