Question

Marlene expects her gross income to be $54,000 this year, and she expects her required deductions to amount to $15,000. Her employer covers 90% of the cost of a $4800-per-year health insurance plan and 80% of the cost of a $900-per-year life insurance plan, with the remainder of the cost coming out of Marlene's pay, and Marlene also expects to contribute 8% of her gross income this year to her 401(k) plan. She wants to calculate how much she will receive for each of her bimonthly paychecks.

Answer 1

Marlene will receive $1,417.50 for each of her bimonthly paychecks.

Explanation:

This can be calculated using the following 3 steps:

Step 1: Calculation of annual deductions to bear by Marlene

Required deductions = $15,000

Contribution to cost of health insurance plan per-year = $4800 * 10% = $480

Contribution to cost of life insurance plan per-year = $900 * 20% = $180

Contribution to this year's 401(k) plan = $54,000 * 8% = $4,320

Step 2: Calculation of annual paychecks

Annual paychecks = Gross income - Required deductions - Contribution to cost of health insurance plan per-year - Contribution to cost of life insurance plan per-year - Contribution to this year's 401(k) plan = $54,000 - $15,000 - $480 - $180 - $4,320 = $34,020

Step 3: Calculation of bimonthly paychecks

Bimonthly paychecks = Annual paychecks / 24 = $34,020 / 24 = $1,417.50

Therefore, Marlene will receive $1,417.50 for each of her bimonthly paychecks.