An employee earned $4,600 in February working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.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

Question

Quizplus · Accepted Answer

The correct answer is A. The employee's gross pay is $4,600. The FICA tax for Social Security is $285.20 (6.2% x $4,600) and the FICA tax for Medicare is $66.70 (1.45% x $4,600). The total FICA tax is $351.90. 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, which is $460 (10% x $4,600). The total deductions are $1,455.90 ($351.90 + $644 + $50 + $460). The employee's net pay is $3,094.10 ($4,600 - $1,455.90).

An Employee Earned $4,600 in February Working for an Employer