Question

C Company has 7 employees who earned a total of $21,000 in March ($3,000 each). CPP deductions are 4.95% paid by the employees and 4.95% paid by the employer. Income tax withholdings amount to $4,500. The employee EI rate is 1.88%. The take-home pay of the 7 employees for March is:

a) $16,758
b) $14,250
c) $15,192
d) $18,000

Answer 1

To calculate the take-home pay of the 7 employees for March, deduct the CPP deductions, income tax withholdings, and employee EI rate from their earnings. The take-home pay of the 7 employees for March is approximately $16,065.70.

Step-by-step explanation:

To calculate the take-home pay of the 7 employees for March, we need to deduct the CPP deductions, income tax withholdings, and employee EI rate from their earnings. Let's break it down:

CPP deductions are 4.95% paid by the employees and 4.95% paid by the employer. So, each employee's CPP deduction is $3,000 x 4.95% = $148.50.

Income tax withholdings amount to $4,500.

The employee EI rate is 1.88%, which is $3,000 x 1.88% = $56.40.

Now, subtract these deductions from the earnings to find the take-home pay of each employee: $3,000 - $148.50 - $4,500 - $56.40 = $2,295.10.

Finally, calculate the total take-home pay for the 7 employees: $2,295.10 x 7 = $16,065.70.

Therefore, the take-home pay of the 7 employees for March is approximately $16,065.70.