Question

Assuming a FICA tax rate of 7.65% on the first $117,000 in wages, 1.45% on amounts in excess of $117,000, and a federal income tax rate of 20% on all wages, what would be an employee's net pay for the year if he earned $180,000 for the year

Answer 1

Answer:

Net pay   $134,136

Explanation:

The computation of the net pay for the year is given below:

Gross Pay                $180,000

Less:

FICA taxes  

On $117000 = 7.65%   $8,950.5  

On (($180,000 - $117,000) × 1.45%) $913.5

Federl income tax  (20% of $180,000)  $36,000

Net pay   $134,136