Question

Neville has a new job which pays $4500 per month. The following taxes will be taken out of his paycheck: • 6.2% for social security 1.45% for Medicare 15% for federal income tax • 7.65% for state income tax Before taxes are deducted from his paycheck, his health insurance premium is deducted, which is $120 each month. Determine Neville's monthly net income.

Answer 1

To find his net income, the first step is to substract the taxes from the salary, this way:

`\begin{gathered} 4500-0.062\cdot4500-0.0145\cdot4500-0.15\cdot4500-0.0765\cdot4500= \\ 4500-0.303\cdot4500=3136.5 \end{gathered}`

Now, substract his health insurance to the salary after taxes are deducted.

`3136.5-120=3016.5`

It means, his monthly net income is $3016.5.