Question

Tim just took a job working for a software company. His contract states he will receive an annual salary of $61,500 and be paid monthly. Each month he will have the following deduction made from his paycheck:

Social Security at a rate of 6.2%
Medicare at a rate of 1.5
State Texes at a rate of 3%
Federal Taxes at rate of 11%
Insurance premiums in the amount of $290

How much can Tim actually expect to receive on his net paycheck each month?
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Answer 1

Tim can expect to receive a net amount of $3,674.19 in his monthly paycheck after deductions such as Social Security, Medicare, Federal and State Taxes, and insurance premiums are subtracted from his gross monthly income.

Step-by-step explanation:

Calculating Tim's Net Paycheck

To determine Tim's monthly net paycheck after deductions, we need to calculate each of the deductions from his gross monthly income. Tim has an annual salary of $61,500, which when divided by 12 months, equals a monthly gross income of $5,125.

Social Security Tax: 6.2% of $5,125 equals $317.75.

Medicare Tax: 1.45% of $5,125 equals $74.31.

Federal and State Taxes: 15% of $5,125 equals $768.75.

Insurance premiums: $290.

Now, add up all the deductions: $317.75 (Social Security) + $74.31 (Medicare) + $768.75 (Taxes) + $290 (Insurance) = $1,450.81 in total deductions.

Finally, subtract the total deductions from the gross monthly income: $5,125 - $1,450.81 = $3,674.19.

Therefore, Tim can expect to receive a net amount of $3,674.19 in his monthly paycheck after all deductions are made.

Answer 2

$3,722.875

Step-by-step explanation:

It was stated that the $61,500 would be payed to Tim annually, therefore before we can calculate the deductions we would first have to divide the annual pay by 12 (months in a year). You would then find that Tim receives $5,125 each month. The total value of the deductions would be 21.7% ( 6.2 + 1.5 + 3 + 11 = 21.7). 21.7% of 5,125 is 1,112.125 therefore, we would subtract this value and the value for the insurance from his monthly pay to find his net paycheck per month [5,125 - (1,112.125 + 290) = $3,722.875]