Question

You have a part-time job that pays $4.75/hr with tips averaging $4.50/hr. Your deductions are FICA (7.65%), federal tax withholding (12.5%), and state tax withholding (6.85%). You work 20 hours per week.

You want to save $40.00/wk. How much is left of your discretionary income per week?

Answer 1

$95.05

Explanation:

The job pays 4.75 per hour and he also collects tips averaging 4.50 per hour.

This means that in 20 hours he will have up to__ since he works 20 hours per week

(4.75 + 4.50) × 20

= $185

FICA deductions = 7.65/100 x 185

= $14.1525

FTW = 12.5/100 × 185

= $23.125

STW = 6.85/100 × 185

= $12.6725

Total amount of all 3 deductions

= $49.95

And remember that he also has to save $40 per week

The discretionary income left with him be

185 -(49.95 + 40)

185 - 89.95

= $95.05