Question

Susan, a recent college graduate, makes a base salary of $70,000 per year. Susan has federal income tax withholding of $12,000, and state tax withholding of $4,000. Employers are required to withhold a 6.2% Social Security tax and a 1.45% Medicare tax. What is Susan's take-home pay?

Answer 1

Susan's take-home pay $48,645.

Explanation:

Given:

Susan, a recent college graduate, makes a base salary of $70,000 per year. Susan has federal income tax withholding of $12,000, and state tax withholding of $4,000. Employers are required to withhold a 6.2% Social Security tax and a 1.45% Medicare tax.

Now, to find Susan's take-home pay.

Basic salary = $70,000.

Now, her tax withholdings:

Federal income tax = $12,000.

State tax = $4,000.

Social security tax = 6.2% of $70,000.

`=(6.2)/(100) * 70,000\\\\=0.062* 70,000\\\\=\$4340.`

Medicare tax = 1.45% of $70,000.

`=(1.45)/(100) * 70000\\\\=0.0145* 70000\\\\=\$1015.`

Now, to get the take-home pay of Susan's we subtract all the tax holdings of federal, state, social and medicare from the basic salary:

`70,000-(12,000+4,000+4340+1015)`

`=70,000-(21,355)`

`=70,000-21,355`

`=\$48,645.`

Therefore, Susan's take-home pay $48,645.