Trey Morgan is an employee who is paid monthly.For the month of January of the current year,he earned a total of $4,538.The FICA tax for social security is 6.2% of the first $127,200 earned each calendar year,and the FICA tax rate for Medicare is 1.45% of all earnings for both the employee and the employer.The amount of federal income tax withheld from his earnings was $680.70.His net pay for the month is:
A)$3,510.14
B)$3,857.30
C)$4,190.84
D)$4,538.00
E)$3,162.98

Question

Quizplus · Accepted Answer

The correct answer is A because the net pay is calculated by subtracting the FICA tax, Medicare tax, and federal income tax from the gross pay. The FICA tax for social security is $4,538 x 6.2% = $280.36. The FICA tax for Medicare is $4,538 x 1.45% = $65.55. The federal income tax withheld is $680.70. Therefore, the net pay is $4,538 - $280.36 - $65.55 - $680.70 = $3,510.14.

Trey Morgan Is an Employee Who Is Paid Monthly