Asked by Francesca Kivitt on May 12, 2024
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An employee earned $4,600 in February working for an employer.The FICA tax rate for Social Security is 6.2% of the first $128,400 earned during each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The employee has $644 in federal income taxes withheld and has voluntary deductions for health insurance of $50 and contributes 10% of gross pay to a retirement plan each month.The employer pays the $200 remainder of the health insurance premium and an equal amount of contribution to the retirement fund.What is the amount of net pay for the employee for the month of February?
A) $3,094.10
B) $3,496.00
C) $3,604.10
D) $3,446.00
E) $2,634.10
Net Pay
The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.
FICA Tax
Federal Insurance Contributions Act tax; a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare.
Federal Income Taxes
Federal income taxes are taxes levied by the national government on taxable income of individuals, corporations, trusts, and other legal entities.
- Acquire understanding in payroll accounting, focusing on the calculation of payroll taxes and net pay.
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Learning Objectives
- Acquire understanding in payroll accounting, focusing on the calculation of payroll taxes and net pay.
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