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Jane works forty hours a week at $10 per hour and averages ten hours a week in overtime. She withholds 10% of her gross wages for a 401(k) plan and receives a 50% matching contribution by her employer. She pays $10 per week for group medical insurance coverage, pays FICA, and withholds 5% of her gross wages for Federal Income Tax. The month is February and she receives four paychecks. 15. How much is Jane’s monthly gross wage? 16. How much do Jane and her employer deposit into her 401(k) plan each month? 17.How much does Jane have deducted each month for FICA? 18.How much does Jane withhold monthly for Federal Income Tax? 19.How much is Jane’s net take-home pay?

User Nevosis
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Answer:

To calculate Jane's monthly gross wage, we first need to determine her weekly gross wage. Jane works 40 hours per week at $10 per hour, so her weekly gross wage is 40 hours * $10/hour = $400.

Next, we need to calculate her overtime pay. Jane averages 10 hours of overtime per week, and overtime pay is usually 1.5 times the regular hourly rate. Therefore, her overtime pay per week is 10 hours * $10/hour * 1.5 = $150.

Adding her regular wage and overtime pay, Jane's total gross wage per week is $400 + $150 = $550.

Since there are four paychecks in February, her monthly gross wage is 4 paychecks * $550/paycheck = $2,200.

To calculate the amount deposited into Jane's 401(k) plan, we need to determine her withholding and the matching contribution from her employer. Jane withholds 10% of her gross wages for the 401(k) plan, so the withholding amount is 10% * $2,200 = $220. Her employer provides a 50% matching contribution, so the employer's contribution is 50% * $220 = $110.

Therefore, Jane and her employer deposit a total of $220 + $110 = $330 into her 401(k) plan each month.

For FICA deductions, we need to calculate the Social Security and Medicare taxes. The Social Security tax rate is 6.2% and the Medicare tax rate is 1.45%. We apply these rates to Jane's gross wages.

The Social Security deduction is 6.2% * $2,200 = $136.40.

The Medicare deduction is 1.45% * $2,200 = $31.90.

Therefore, Jane has a total of $136.40 + $31.90 = $168.30 deducted each month for FICA.

For Federal Income Tax withholding, Jane withholds 5% of her gross wages. The Federal Income Tax withholding is 5% * $2,200 = $110.

To calculate Jane's net take-home pay, we subtract all the deductions from her gross wage:

Gross wage: $2,200

401(k) withholding: $220

FICA deductions: $168.30

Federal Income Tax withholding: $110

Medical insurance: $10

Net take-home pay: $2,200 - $220 - $168.30 - $110 - $10 = $1,691.70

Jane's net take-home pay is $1,691.70 per month.

User Zhiyao
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