A form of economic organization that relies primarily on private ownership of productive assets, freedom of exchange, and market
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Answer:
The correct answer is B) 2,880
Step I - Ascertain All Pre Tax Deductions
<em>Deduction 1 - Voluntary Deduction</em>
This is given as $5. This is the only pretax deduction given.
To obtain John Jansens net pay, first we need to establish all the other deductions.
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<em>Deduction 2 - FICA Taxes</em>.
FICA means “Federal Insurance Contributions Act.” FICA tax is mandatorily deducted from workers' paychecks to pay for the Social Security retirements and Medicare (Hospital Insurance) benefits for elderly Americans.
FICA Tax = 8% of Gros Earnings
Therefore FICA Tax =
FICA Tax = $319.60
<em>Deduction 3 - Federal Income Tax</em>
This has already been given as $ 675
<em>Deduction 4 - State Income Tax</em>
This is given as 3% of gross earnings.
That is 3995 x (3/100) or
=
= $119.85
Step 2 - To calculate the net pay, we need to seperate pre-tax deductions from after tax deductions.
The only pre tax item we have on the list is deduction 1 which is Voluntary deduction of $5.
Therefore Net Pay for John Jansen is ((Gross Pay Less Pretax Deductions) - Sum of other Taxes)
= [($4000 - $5) - ($319.60+$675+$119.85)
=$3,995 - $1,114.45
= $2,880.55 or $2 880 approximately.
Cheers!