Portia Grant is an employee who is paid monthly.For the month of January of the current year,she earned a total of $8,260.The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%.The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay.The amount of federal income tax withheld from her earnings was $1,325.17.Her net pay for the month is:

Question

Quizplus · Accepted Answer

First, we need to calculate the FICA taxes:
Social Security tax = $8,260 x 6.2% = $511.72
Medicare tax = $8,260 x 1.45% = $119.77
Then, we need to calculate the FUTA and SUTA taxes on the first $7,000 of her pay:
FUTA tax = $7,000 x 0.6% = $42.00
SUTA tax = $7,000 x 5.4% = $378.00
Next, we subtract the total taxes from her earnings:
$8,260 - $511.72 - $119.77 - $42.00 - $378.00 = $7,208.51
Finally, we subtract the federal income tax withheld from her earnings:
$7,208.51 - $1,325.17 = $5,883.34
Therefore, Portia's net pay for the month is $6,302.94.

Portia Grant Is an Employee Who Is Paid Monthly