Question

You are paid $8.35/hr at your part-time job. Your deductions are FICA (7.65%), federal tax withholding (9.15%), and state tax withholding (7.5%). Your travel expenses are $6.30 per day worked. You work 16 hours over a 4-day period of time. What is your net income after travel expenses?

$75.94


$78.13


$86.76


$87.01

Answer 1

Option A $75.94 is your net income after travel expenses.

Explanation:

You are paid at your part time job for 1 hour = $8.35

Total work over a 4 day period of time = 16 hours

Total pay for 16 hours = $8.35 × 16 = $133.60

FICA deductions = 7.65% of 133.60

= 0.0765 × 133.60 = $10.2204

Federal tax withholding = 9.15% of 133.60

= 0.0915 × 133.60 = $12.2244

State tax withholding = 7.5% of 133.60

= 0.075 × 133.60 = $10.02

Now add all the taxes withholding = 10.2204 + 12.2244 + 10.02 = $32.4648

Now subtract all the taxes from total pay = 133.60 - 32.4648 = $101.1352

Travel expenses for 4 days = 101.1352 - (6.30×4)

= 101.1352 - 25.50 = 75.9352 rounded to $75.94