Assume your gross pay per pay period is $3,100 and you are in the 28 percent tax

Question

Assume your gross pay per pay period is $3,100 and you are in the 28 percent tax bracket. Calculate your net pay and spendable income if you save $310 per pay period in an employer-sponsored tax-sheltered annuity. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

Assume your gross pay per pay period is $3,100 and you are in the 28 percent tax bracket. Calculate your net pay and spendable income if you save $310 per pay period in an employer-sponsored tax-sheltered annuity. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

Explanation / Answer

Net pay = Gross pay×(1-Tax rate)

= $3,100×(1-28%)

= $2,232

Spendable income = Net pay-Savings

= $2,232-$310

= $1,922

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