James Marbury is the payroll accountant at All's Fair Gifts. The employees of All's Fair Gifts are paid semimonthly. Lauren Stenn comes to him on April 2 and requests a pay advance of $1,000, which Lauren will pay back in equal parts on the April 15 and May 15 paychecks. Lauren is single with one dependent under 17 and is paid $52,280 per year. Lauren contributes 3 percent of gross pay to a 401(k) and has $144 per paycheck deducted for a Section 125 plan.
Compute the net pay on Lauren's April 15 paycheck. The applicable state income tax rate is 5.25 percent. Use the percentage method for manual payroll systems with Forms W-4 from 2020 or later in Appendix C to determine the federal income tax. Assume box 2 is not checked.
