Given the following information, determine the burdened hourly wage rate for an equipment operator. Assume the equipment operators take full advantage of the retirement benefit

Question

Wage rate—$36.25 per hour
Hours worked—50 hours per week for 40 weeks, and 40 hours per week for nine weeks
Vacation, holidays, and sick leave—Three weeks at 40 hours per week
Overtime—Time-and-a-half for any hours over 40 per week
Gas allowance—$100 per month
Annual bonus—$750
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—2.5 percent on the first $22,000 of wages
Worker’s compensation insurance—$9.27 per $100.00 of wages
General liability insurance—0.65 percent of wages
Health insurance (company’s portion)—$385 per month per employee
Retirement—$0.75 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 × $36.25/hr) + (10 hr/wk × 40 wk × $36.25/hr × 1.5)

+ $100/mo × 12 mo + $750



Wages = $99,100



Social Security = $99,100 × 0.062 = $6,144



Medicare = $99,100 × 0.0145 = $1,437



FUTA = $7,000 × 0.006 = $42



SUTA = $22,000 × 0.025 = $550







General liability insurance = $99,100 × 0.0065 = $644



Health insurance = $385/month × 12 months = $4,620



The company contributes up to 4.5 percent (75 percent of 6 percent) of the employee’s wages to the employee’s retirement account.



Retirement = $99,100 × 0.045 = $4,460



Benefits = $6,144 + $1,437 + $42 + $550 + $9,187 + $644 + $4,620 + $4,460= $27,084



Billable hours = 50 hours per week × 40 weeks + 40 hours per week × 9 weeks



Billable hours = 2,360 hours