Question

You are paid $11.75/hr. You work 40 hr/wk. Your deductions are FICA (7.65%), Federal tax withholding (10.75%), and state tax withholding (7.5%)
1) Assuming you budget a month as 4 weeks, how much is your total realized income, fixed expenses, and discretionary expenses.
2) If you are able to work 20 hours of overtime the next month and are paid 1.5 times your regular rate, how does this change your budget for that month?
3) How much can you put towards savings each month if you eliminated your discretionary expenses?


Please help! Graduation is at steak!

Answer 1

Total income = 11.75 x 40 x 4 = $1,880
Less: FICA = 0.0765 x 1,880 = $143.82
Federal tax = 0.1075 x 1,880 = $202.10
Stare tax = 0.075 x 1,880 = $141
Net Income = $1,393.08

Answer 2

Answer:

You are paid $11.75/hr. You work 40 hr/wk.

Weekly income is :

$11.75\times40=470$

So, monthly income becomes :

$11.75\times40\times4=1880$

Deductions are given as :

FICA (7.65%) = $0.0765\times1880=143.82$

Federal tax withholding (10.75%) = $0.1075\times1880=202.10$

State tax withholding (7.5%) = $0.075\times1880=141$

So, net income = $1880-(143.82+202.10+141)$ = $1393.08

2. 20 hours of overtime in next month at 1.5 times your regular rate, so rate is $1.5\times11.75=17.625$

So, overtime pay is = $20\times17.625=352.50$

And adding this to normal pay we get , 1880+352.50=$2232.50

Now deductions will be :

FICA at 7.65% = $0.0765\times2232.50=170.786$

Federal tax withholding at 10.75% = $0.1075\times2232.50=239.993$

State tax withholding at 7.5% = $0.075\times2232.50=167.437$

Total deductions are = 170.786+239.993+167.437 = $578.216

So, net income becomes = 2232.50-578.216 = $1654.284

3. No discretionary expense is given in the question.