Question

Kalen O'Brien earned $705 this week. The deductions from her pay were as follows:

FIT	$77.00
FICA—OASDI	43.71
FICA—HI	10.22
State income tax	35.25
State disability insurance	8.47
Health insurance premium	19.90
Credit union contribution	37.00
United Fund contribution	5.00

O'Brien's employer just received a garnishment order (credit card debt of $3,690) against her pay. Compute the following:

round your answers to the nearest cent.

a. O'Brien's disposable earnings	$
b. The amount of her pay subject to the garnishment	$

Answer 1

a) O'Brien's disposable earnings

==> $538.82

Explanation :

Gross earnings $705

Less required deductions :

FIT $77.00

FICA - OASDI 43.71

FICA -HI 10.22

State income tax 35.25 ( 166.18 )

Disposable income $ 538.82

b) The amount of her pay subject to the garnishment.

==> $ 134.705

Explanation :-

To calculate the wage garnishment,we take the lower of :-

a) The quantity by which disposable earnings are greater than 30 times the federal minimum hourly wage of $ 7.05 ; 30 × $ 7.05 = $ 211.5.Disposable earnings exceed this amount by : $ 538.82 - $ 211.5 = $ 327.32.

b) 25% of Disposable earnings : 25% × $ 538.82 = $ 134.705.

$ 134.705 < 327.32 , so the wage garnishment is $134.705