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Mattola Company is giving each of its employees a holiday bonus of $100 on Dec 20th (a nonpayday). The company wants each employee's check to be $100. The supplemental tax percent is used.
a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)? Please demonstrate the process used to achieve your answer
b. What would the net amount of each bonus check be if the company did not gross up the bonus? Please demonstrate the proces used to achieve your answer.
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