An employer has one employee who earned $3,000 his first month of employment. Th

Question

An employer has one employee who earned $3,000 his first month of employment. The employee’s federal income tax withholding (FITW) is $400, and the employee has voluntary monthly deductions of $125 for health insurance and $25 for union dues. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employer's FUTA tax rate is 0.6% and the SUTA tax rate is 5.4%. (Note: The limit for FICA Social Security is $128,400 and there is no limit for FICA Medicare. The limit is $7,000 for FUTA and $9,000 for SUTA.) What are the employee's total deductions for the first month of the year?

An employer has one employee who earned $3,000 his first month of employment. The employee’s federal income tax withholding (FITW) is $400, and the employee has voluntary monthly deductions of $125 for health insurance and $25 for union dues. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employer's FUTA tax rate is 0.6% and the SUTA tax rate is 5.4%. (Note: The limit for FICA Social Security is $128,400 and there is no limit for FICA Medicare. The limit is $7,000 for FUTA and $9,000 for SUTA.) What is the employee's net pay for the first month of the year?

Explanation / Answer

Req 1: Total Deductions for the first month of Pay: FICA social security tax (3000*6.2%) 186 FICA Medicare (3000*1.45%) 43.5 Federal Income tax witholding 400 Voluntary Contribution to health insurance 125 Union dues 25 Total Deductions from Employee pay 779.5 Rreq 2: Net pay of the employee: Gross Pay of the month 3000 Less: Total Deductions as computed above 779.5 Net pay of the employee: 2220.5

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.