Question

John worked 43 hours last week. His hourly rate is $9.00. He has the following deductions taken from his pay: Social Security tax at the rate of 6.2 percent, Medicare tax at the rate of 1.45 percent, health insurance premiums of $15.00, and 401(k) contributions of 5 percent of gross pay. John also has federal income tax withheld at the rate of 10 percent. Federal taxes do not apply to the 401(k) contribution. John’s net pay for last week was

Answer 1

Assuming John does not get premium pay for hours over 40, his pay will be ...

... 43 hours × $9.00 = $387

... - 6.2% × $387 = $23.99

... - 1.45% × $387 = $5.61

... - $15.00

... - 5% × $387 = $19.35

... - 10% × ($387 -19.35) = $36.77

... = $286.28 . . . . net pay after all the deductions

Answer 2

Answer:

$286.28

Explanation:

Working 43 hours at a rate of $9 per hour gives John

43(9) = $387 gross pay.

Social Security is 6.2% of gross pay; 6.2% = 6.2/100 = 0.062; this gives us a deduction of

387(0.062) = 23.994 ≈ $23.99

Medicare is 1.45% of gross pay; 1.45% = 1.45/100 = 0.0145; this gives us a deduction of

387(0.0145) = 5.6115 ≈ $5.61

Health insurance is a deduction of $15.

401(k) contributions are 5% of gross pay; 5% = 5/100 = 0.05; this gives us a deduction of

387(0.05) = $19.35

Federal tax is deducted after the 401(k) contribution.  This means the tax is going to be 10% of

387-19.35 = $367.65

10% = 10/100 = 0.1; this gives us a deduction of

367.65(0.1) = 36.765 ≈ $36.77

This gives John a net pay of:

387-23.99-5.61-15-19.35-36.77 = $286.28