Mattola Company is giving each of its employees a holiday bonus of $100 on December 13, 20-- (a nonpayday). The company wants each employee's check to be $100. The supplemental tax percent is used. Nobody has capped for OASDI prior to the bonus check. 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)?

The gross amount of each bonus if each employee pays a state income tax of 2.8% is $154

Explanation:

According to the given we have the following:

state income tax = 2.8 %

FICA social security tax = 6.20 %

FICA medicare tax = 1.45 %

Therefore, in order to calculate the gross amount of each bonus if each employee pays a state income tax of 2.8% we would have to make the following calculation:

gross amount of each bonus = $100/(100 % - 25 % - 6.20 % - 1.45 % - 2.8 %)

gross amount of each bonus = $100 / 64.55 %

 gross amount of each bonus =$154

The gross amount of each bonus if each employee pays a state income tax of 2.8% is $154

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