Question

Kenneth Washington's weekly gross earnings for the week ending December 18 were $3,460, and his federal income tax withholding was $726.6. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Washington's net pay? If required, round your answer to two decimal places.

Answer 1

$2,473.9

Explanation:

The computation of net pay is shown below:-

Net pay = Gross pay - Federal income tax withholding - Social security tax - Medicare tax

= $3,460 - $726.6 - ($3,460 × 6%) - ($3,460 - 1.5%)

= $3,460 - $726.6 - $207.6 - $51.9

= $2,473.9

Therefore for computing the net pay we simply applied the above formula i.e the three above taxes are subtracted from the gross pay to arrive net pay