BJ Entertainment has two employees in 2013. Chad earns $3,800 per month and Jordan, the manager, earns $10,500 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 15 percent of gross earnings for Chad and 20 percent for Jordan. Both Chad and Jordan have been employed all year.
Required:
a. Calculate the net pay for both Chad and Jordan for March.
b. Calculate the net pay for both Chad and Jordan for December.
c. Is the net pay the same in March as December for both employees? Why or why not?
d. What amounts will BJ's report on the 2013 W-2s for each employee?