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Cal has worked 120 hours this month and earned $4380. If he works 1500 hours this year, how much will be paid in CPP and EI assuming CPP is at 5.45% and EI is at 1.58%, and the first $3500 are CPP exempt?

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Answer:

Explanation:

To calculate the amount Cal will be paid in CPP (Canada Pension Plan) and EI (Employment Insurance) for the entire year, we first need to find his total earnings for the year. Then, we can calculate the CPP and EI contributions.

Calculate Cal's annual earnings:

Cal's hourly rate can be found by dividing his total earnings for the month by the number of hours worked in the month:

Hourly rate = Total earnings / Hours worked

Hourly rate = $4380 / 120 hours

Hourly rate ≈ $36.50

Now, to find his annual earnings, we can multiply his hourly rate by the total number of hours he will work in a year:

Annual earnings = Hourly rate * Total hours worked in a year

Annual earnings = $36.50 * 1500 hours

Annual earnings = $54,750

Calculate CPP contribution:

CPP is applicable on earnings above the exemption amount. In this case, the first $3500 are CPP exempt. So, we need to find the portion of Cal's earnings that is subject to CPP.

Portion subject to CPP = Annual earnings - CPP exemption amount

Portion subject to CPP = $54,750 - $3500

Portion subject to CPP = $51,250

CPP contribution = Portion subject to CPP * CPP rate

CPP contribution = $51,250 * 5.45% (as a decimal)

CPP contribution ≈ $2790.63

Calculate EI contribution:

EI contribution is applicable on the entire earnings.

EI contribution = Annual earnings * EI rate

EI contribution = $54,750 * 1.58% (as a decimal)

EI contribution ≈ $865.35

So, Cal will be paid approximately $2790.63 in CPP and $865.35 in EI for the entire year, assuming CPP is at 5.45% and EI is at 1.58%, and the first $3500 are CPP exempt.

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