Question

Tom's gross pay for the week is $800. Tom's deduction for federal income tax is based on a rate of 18%. Tom has no voluntary deductions. Tom's yearly pay is under the maximum limit for FICA, which is 7.65%. What is the amount of Tom's net pay?

- $594.80
- $738.80
- $656.00
- $533.60

Answer 1

The amount of Tom's net pay is $594.80.

Step-by-step explanation:

To calculate Tom's net pay, we need to consider the deductions from his gross pay. Tom's federal income tax deduction is 18% of his gross pay, which is
`\(0.18 * 800\)`. This results in a federal income tax deduction of $144. Tom's FICA deduction, at a rate of 7.65%, is
`\(0.0765 * 800\)`, amounting to $61.20. Subtracting these deductions from his gross pay gives us the net pay:

`\[800 - 144 - 61.20 = 594.80\]`

However, this calculation is not one of the given answer choices. Upon review, it seems there might be an error in the provided options. The correct net pay, based on the deductions mentioned, should be $594.80. Therefore, the provided options do not align with the accurate calculation of Tom's net pay, and the closest option is $594.80, not $656.00. Please double-check the options for accuracy in your assessment.

In conclusion, considering the deductions for federal income tax and FICA, Tom's net pay should be $594.80. It's essential to ensure the accuracy of the provided options to match the calculated result.