Question

Through the classifieds of the Miami Herald Rhonda Brennan found her first job after graduating from college. She was delighted when the offer came through at $15.60 per hour. She completed her W-4 stating that she is married with a child and claims an allowance of 3. Her company will pay her biweekly for 80 hours (assume a tax rate of 6.2% on $118,500 for Social Security and 1.45% for Medicare). Calculate her take-home pay for her first check. (Use Table 71 and Table 7.2) (Round your answer to the nearest cent.) Net pay

Answer 1

Answer -

Net Pay = $1106.968 ≈ $1107

Calculation:

As per given information,

Wages rate per hour = 415.60 per hour

Work hours = 80 hours

Social security tax rate = 6.2%

Medicare tax = 1.45%

No. of withholding allowance = 3 allowances

Biweekly one withholding allowance = $153.80

Now,

1. Gross pay:

Wages rate per hour * Work hours

= $15.60 per hour * 80 hours

= $1248

2. Social security tax:

= Gross pay * 6.2%

= $1248 * 6.2%

= $77.376

3. Medicare tax:

= Gross pay * 1.45%

= $1248 * 1.45%

= $18.096

4. Total allowance for one withholding allowance:

= No. of withholding allowance * Biweekly one withholding allowance

= 3 allowance * $153.80

= $461.40

5. Excess wages:

= Gross pay - Total allowance for one withholding allowance

= $1248 - $461.40

= $786.60

6. Income tax withhold:

= (Excess wages - $331) * 10%

= ($786.60 - $331) * 10%

= $45.56

7. Net pay:

= Gross pay - (Social security tax + Medicare tax + Income tax withheld)

= $1248 - ($77.376 + $18.096 + $45.56)

= $1106.968