Question

You are paid $7.25/hour. You work 40 hours/week for 2 weeks. Your involuntary deductions are FICA (7.65%), federal withholding (14%) and state withholding (7%). How much is your realized income?

$290.00
$206.91
$580.00
$413.83

Please explain!!

Answer 1

$413.83

Explanation:

Your gross pay for 80 hours is ...

(80 hours) × ($7.25/hour) = $580

Your total deductions are ...

7.65% +14% +7% = 28.65%

So, your realized pay is ...

gross pay - deductions =

$580 - 0.2865×580 = $580 -166.17 = $413.83

Answer 2

$413.83

Explanation:

Your earnings for the two weeks are

7.25(40)(2) = 580

The deductions for FICA will be

0.0765(580) = 44.37

The deductions for federal withholding will be

0.14(580) = 81.2

The deductions for state withholding will be

0.07(580) = 40.6

This makes your realized income

580-(44.37+81.2+40.6) = 580-166.17 = 413.83