Question

At his new job, Manuel expects to make about $37,850 per year. He is paid bi-weekly. 15% of his gross pay will be withheld for federal income tax, 4% for state income tax and 7.65% for Social Security and Medicare taxes. Calculate his net pay, and how much he will pay in taxes each paycheck. a. Convert the Annual Pay to Biweekly Pay b. How much money will he pay in taxes each paycheck? c. What is the Net Pay (take-home pay)?

Answer 1

(a)$1455.77

(b)$387.97

(c)$1067.80

Step-by-step explanation:

(a)Manuel's proposed annual income = $37,850

There are 52 weeks in a year, this means that if he is paid bi-weekly (every two weeks), he will receive his salary 26 times a year.

His Biweekly pay will be:

`\begin{gathered} =(37,850)/(26) \\ =\$1455.77 \end{gathered}`

(b)

Federal Income Tax = 15% of his gross pay

`\begin{gathered} =(15)/(100)*1455.77 \\ Federal\; Income\; Tax=\$218.37 \end{gathered}`

State Income Tax = 4% of his gross pay

`\begin{gathered} =(4)/(100)*1455.77 \\ State\; Income\; Tax=\$58.23 \end{gathered}`

Social Security and Medicare taxes = 7.65% of his gross pay

`\begin{gathered} =(7.65)/(100)*1455.77 \\ =\$111.37 \end{gathered}`

The total taxes paid will be:

`\begin{gathered} Taxes=218.37+58.23+111.37 \\ =\$387.97 \end{gathered}`

(c)

Therefore, his net pay (take-home pay) will be:

`\begin{gathered} \text{Net Pay==}1455.77-387.97 \\ =\$1067.80 \end{gathered}`