Question

Jeff Jones earns $1,200 per week. He's married and claims four withholding allowances. The social security rate is 6.2% on $118,500, and Medicare is 1.45%. Each paycheck, his employer also deducts $42.50 for health insurance. What's his net pay?

Answer 1

Answer:

$1068.95

Step-by-step explanation:

Gross Pay = $1200

Health Insurance deducted = $42.50

Taxable Pay = 1200 - 42.50

                     = $1157.50

Social security rate = 6.2%

                                = $\frac{6.2}{100}$

                                = 0.062    (converted into decimal)

Social security Tax = Taxable Pay * Social security rate

                                = 1157.50 *0.062

                                = 71.765

                                = $71.77 (rounded off to the nearest hundredth)

Medicare Tax rate = 1.45%

                               = $\frac{1.45}{100}$

                               = 0.0145      (converted into decimal)

Medicare Tax = Taxable Pay * Medicare Tax rate

                       = 1157.50 * 0.0145

                        = $16.78

Net Pay =  Gross Pay - Health Insurance deducted - Social security Tax - Medicare Tax

= 1200 - 42.50 - 71.77 - 16.78

= 1200 - (42.50 + 71.77 + 16.78)

= 1200 - 131.05

= $1068.95