Question

Diane earns $14,500 a year. She pays 11% of her gross income for federal, state, and local taxes. She is taxed at the FICA rate of 7.65%. She has 3.5% of her income withheld for personal deductions. She is paid biweekly. What is her net pay for each pay period? Round to nearest cent.

Answer 1

$434.16346

Explanation:

Given that :

Gross earning= $14500

Federal, state and local taxes = 11%

0.11 * $14500 = $1595

FICA tax rate = 7.65%

0.0765 * 14500 = $1109.25

Personal deduction :

3.5% * 14500

0.035 * 14500 = $507.50

Total deduction :

$(1595 + 1109.25 + 507.50)

= $3211.75

Net earning : $(14500 - 3211.75) = 11288.25

Since she is paid bi weekly:

Number of biweeks in a year = 52 /2 = 26

Number of payments per annum = 26

Hence,

Net pay per period :

11288.25 / 26

= $434.16346

=