Question

An employee earns $5,750 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? a. $5,207.b. 53.c. $5,296.70.d. $5,158.32.e. $4,826.22.f. $4,875.42.

Answer 1

Net Pay for the employee $5,238.125

Step-by-step explanation:

The computation of the amount of net pay for the employee for the month of Jan is shown below:

Particulars Amount

Wages Per Month $6,150

Less:

Federal Income Taxes Withheld -$208

FICA Social Security -$356.50 ($5,750 × 6.2%)

FICA Medicare -$83.375 ($5,750 × 1.45%)

Health Insurance -$176

Retirement Plan -$88

Net Pay for the employee $5,238.125

This is the answer but the same is not mentioned in the given options.