Question

Boris is a web developer. His annual gross salary is $45,000. From this, he must pay social security (calculated as 10% of his gross pay) plus income tax (on the gross pay before the social security deduction).
There is a progressive tax system for calculating income tax, where the first $10,000 is tax free, and anything above $10,000 is taxed at 25%.

What is his take home pay? Round your answer to the nearest dollar.

Answer 1

Answer:

31,750

Step-by-step explanation:

Social Security = $45,000 x 10% = $45,000 x 10/100 = $4,500

Income tax = $(45,000 - 10,000) x 25% = $35,000 x 25/100 = $8,750

Take Home Pay = $45,000 - $4,500 - $8,750 = $31,750

Answer 2

Answer: $32,625

Step-by-step explanation:

40,000-10,000 = 35,000 ---> how much is taxed

35,000 x .25 = 8,750 = income tax

45,000 - 8,750 = 36,250

36,250 x .1 = 3,625 ---> social security

45,000 (gross pay) - 8,750 (income tax) - 3,625 = 32, 625