Answer: a) Maximum contribution - $11,500
b). The contribution by the $1,279.20
C). Take home pay with the retirement contribution deduction = $487.26
d). Take home pay without the retirement contribution deduction = $675.41
Explanation: George being a contributor to the retirement savings account is entitled to some allowances.
The maximum contribution he can make is $11,500 while the complany contributes 3% of his salary. That is 3% × $42,640 = $1,279.20
Having a weekly pay of $820 ($42,640/52 weeks) and being married his take home will be; Weekly Retirement contribution ($11,500 ÷ 52 weeks) = (221.15)
FIT ($820.00 – $221.15 = $598.85 taxable) (30.00)
State income tax ($820.00 × 0.023) =$18.86
Therefore take home =$ 487.26 *Married, 2 allowances.
Finally, George’s take-home pay without the retirement contribution deducted:
Weekly pay =$820.00
FICA—OASDI =($50.84)
FICA—HI = (11.89)
FIT (on $820.00) =(63.00)
State income tax ($820.00 × 0.023) = (18.86)
Therefore, Take-home pay =$675.41
