Question

An employee earns $6,150 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $127,200 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January

Answer 1

Answer:

4931.6

Explanation:

In order to calculate net pay for the month of January, we should deduct all expenses from the employee's gross salary except the current FUTA tax rate and current SUTA tax rate.

Salary                                             $6,150

Federal Income tax withheld       ($208)

FICA for social security(w)           ($657.2)

FICA for Medicare                        ($89.175)

Health Insurance                           ($176)

Retirement Plan                             ($88)

Net Pay                                           $4,931.6

Working

FICA for social security

Annual Earning = 127,200/12months

Monthly Earning = 10,600 x 6.2% = $657.2