ANSWERS………….
1. $28.91 + 17.79 + 9.18 =
$55.88
2. $10.31 + 11.20 + 20.00 + 5.00 =
$46.51
3. $456.78 - $56.19 =
$400.59
4. $45.23 + $41.50 =
$86.73
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2-6 HOW DO WE CALCULATE NET PAY FROM AN
EARNINGS STATEMENT?
The earnings statement attached to
your paycheck lists all your
deductions, your gross pay, and your
net pay for the pay period.
Net Pay= Gross Pay – Total Deductions
2
LET’s PRACTICE
Juan’s gross weekly salary is $400. He is married and claims 2
allowances. The social security tax is 6.2% of the first $62,700. The
medicare tax is 1.45% of gross pay. The state tax is 1.5% of gross pay.
Each week he pays $10.40 for medical insurance and $2.50 for charity. Is
Juan’s earnings statement correct? (Use P.643 in text for FIT)
Dept.
Employee
04
Check #
WEEK
ENDING
20566
4/16/04
Teijeiro,J.
TAX DEDUCTIONS
FIT
SOC.
SEC.
38.00
24.80
MEDICARE
5.80
STATE
6.00
LOCAL
------
312.50
PERSONAL DEDUCTIONS
MEDICAL
10.40
NET PAY
UNION DUES
-----
OTHERS
2.50
Solution: Find the total deductions
Federal Withholding: (From P.643)……………………..$38.00
Social Security: 6.2% of $400……………………………...24.80
Medicare: 1.45% of $400……………………………………5.80
State tax: 1.5% of $400…………………………………….....6.00
Medical insurance: …………………………………………10.40
Charity: ……………………………………………………….2.50
Net Pay is Gross Pay minus Total Deductions or $400 - $87.50 = $312.50
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