Question

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of 8,438. The FICA tax for social security is 6.2% of the first $128,400 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,400.07. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)

Answer 1

Her net pay for the month is $6,392.42

Step-by-step explanation:

In order to calculate Her net pay for the month we would have to calculate the following formula:

net pay for the month=Gross earnings-Total Deductions

Gross earnings=$8,438.00

Deductions:

Social security tax=$8,438*6.2% =$523.16

Medicare tax=$8,438*1.45% =$122.35

Federal income tax=$1,400.07

Total deductions=$523.16+$122.35+$1,400.07

=$2,045.58

Therefore, Net pay=$8,438.00-$2,045.58=$6,392.42