Given the following information, determine the burdened hourly wage rate for a carpenter. Assume the carpenters take full advantage of the retirement benefit.

Question

Wage rate—$23.00 per hour
Hours worked—45 hours per week for 30 weeks, and 40 hours per week for 20 weeks
Vacation, holidays, and sick leave—Two weeks at 40 hours per week
Overtime—Time-and-a-half for any hours over 40 per week
Gas allowance—$150 per month
Annual bonus—$300
Social Security—6.2 percent on the first $127,200 of wages
Medicare—1.45 percent of all wages
FUTA—0.6 percent on the first $7,000 of wages
SUTA—5.8 percent on the first $10,000 of wages
Worker’s compensation insurance—$12.25 per $100.00 of wages
General liability insurance—0.55 percent of wages
Health insurance (company’s portion)—$450 per month per employee
Retirement—$0.50 per $1.00 contributed by the employee on 6 percent of the employee’s wages

Answer 1

Determine the wages and burden as follows:

Wages = (40 hr/wk × 52 wk × $23.00/hr) + (5 hr/wk × 30 wk × $23.00/hr × 1.5)
+ $150/mo × 12 mo + $300

Wages = $55,115

Social Security = $55,115 × 0.062 = $3,417

Medicare = $55,115 × 0.0145 = $799

FUTA = $7,000 × 0.006 = $42

SUTA = $10,000 × 0.058 = $580



General liability insurance = $55,115 × 0.0055 = $303

Health insurance = $450/month × 12 months = $5,400

The company contributes up to 3 percent (50 percent of 6 percent) of the employee’s wages to the employee’s retirement account.

Retirement = $55,115 × 0.03 = $1,653

Benefits = $3,417 + $799 + $42 + $580 + $6,752 + $303 + $5,400 + $1,653 = $18,946

Billable hours = 45 hours per week × 30 weeks + 40 hours per week × 20 weeks

Billable hours = 2,150 hours