Problem:
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.
Required:
Question 1: 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
Question 2: 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.
Note: Please show the work not just the answer.