Question

Sean Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March, he earned $300.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($500.00), and the employer withholds the appropriate taxes for the tips from this first pay in March.

Answer 1

If we calculate the net take home pay and we assume the employer withheld federal income tax (wage-bracket, married, 2 allowances), social security taxes, and state income tax (2%)

Married at least $500 but not more than $510       $21
Social Security at 4.2%                                          $21
State income tax at 2%                                          $10
Total taxes:                                                             $52

Total net take-home pay:                                       $598