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2 votes
Gabriel Harris earns an annual salary of $156,000 as CFO of

TechMedia, Inc. He is married and claims three dependents. TechMedia
recently converted from a weekly pay plan to a monthly pay plan.
How much more will Gabriel have deducted from his monthly pay
than from his weekly pay for state income tax?

User Okoboko
by
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2 Answers

6 votes

Answer:

Step-by-step explanation:

Gabriel Harris earns an annual salary of $156,000 as CFO ofTechMedia, Inc. He is married and claims three dependents. TechMediarecently converted from a weekly pay plan to a monthly pay plan.How much more will Gabriel have deducted from his monthly paythan from his weekly pay for state income tax?

User Joz
by
4.2k points
3 votes

Final Answer:

Gabriel will have more state income tax deducted from his monthly pay than from his weekly pay.

Step-by-step explanation:

The change from a weekly pay plan to a monthly pay plan impacts the calculation of state income tax withholding. When an employer converts from a weekly pay schedule to a monthly one, the amount withheld for state income tax is typically based on the employee's annual salary, prorated over 12 months. This means that Gabriel's monthly pay will likely be higher than his weekly pay, leading to a higher state income tax deduction.

In a weekly pay plan, the state income tax withholding is calculated based on the weekly earnings. However, in a monthly pay plan, the annual salary is divided by 12 months to determine the monthly withholding. This can result in a higher per-paycheck deduction for state income tax.

To illustrate, if Gabriel's annual salary remains constant after the conversion, his monthly pay would be approximately four times his weekly pay. Consequently, the state income tax withholding from his monthly paychecks would be higher than the cumulative withholding from four weekly paychecks. This difference arises due to the proration of the annual salary over the 12 months of the year.

In summary, the transition from a weekly to a monthly pay plan usually leads to a higher state income tax withholding on a per-paycheck basis. Therefore, Gabriel can expect a greater deduction from his monthly pay compared to his weekly pay.

User Steve Yohanan
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4.6k points