Assuming a FICA tax rate of 7.65% on the first $106,800 in wages, and a federal income tax rate of 20% on all wages, what would be an employee's net pay for the year if he earned $92,000?

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of FICA tax that will be deducted:
FICA tax = 7.65% x $92,000 = $7,038

Next, we need to calculate the amount of federal income tax that will be deducted:
Federal income tax = 20% x $92,000 = $18,400

So the total amount of taxes deducted will be:
Total taxes = FICA tax + Federal income tax = $7,038 + $18,400 = $25,438

Finally, we need to subtract the total taxes from the employee's gross pay to find the net pay:
Net pay = Gross pay - Total taxes = $92,000 - $25,438 = $66,562

Therefore, the answer is D.

Assuming a FICA Tax Rate of 7