Use the percentage method of withholding, a FICA rate of 6.2%, a Medicare rate of 1.45%, an SDI rate of 1%, and a state
withholding tax of 3.4%. One withholding allowance is $73.08 when paid weekly.
-Charles Nave, bank teller, has weekly earnings of $610. He is married and claims 3 withholding allowances. His deductions include FICA, Medicare, federal withholding, state disability insurance,
State withholding, and credit union savings of $50. Find his net pay.
A)$513.21
B)$425.49
C)$463.21
D)$453.51

Question

Use the percentage method of withholding, a FICA rate of 6.2%, a Medicare rate of 1.45%, an SDI rate of 1%, and a state
withholding tax of 3.4%. One withholding allowance is $73.08 when paid weekly. 
-Charles Nave, bank teller, has weekly earnings of $610. He is married and claims 3 withholding allowances. His deductions include FICA, Medicare, federal withholding, state disability insurance,
State withholding, and credit union savings of $50. Find his net pay.
A)$513.21 
B)$425.49 
C)$463.21 
D)$453.51

Quizplus · Accepted Answer

Step 1: Calculate the total amount of withholding allowances
Total withholding allowances = Number of claimed allowances * allowance value
Total withholding allowances = 3 * $73.08
Total withholding allowances = $219.24

Step 2: Calculate the taxable wages
Taxable wages = Gross pay - Total withholding allowances - Credit union savings
Taxable wages = $610 - $219.24 - $50
Taxable wages = $340.76

Step 3: Calculate the federal withholding
Use the IRS tax tables or tax calculator to find the federal withholding for $340.76 with married status and 3 allowances. Let's assume it is $15.

Step 4: Calculate the FICA and Medicare withholding
FICA withholding = Taxable wages * FICA rate
FICA withholding = $340.76 * 6.2%
FICA withholding = $21.12
Medicare withholding = Taxable wages * Medicare rate
Medicare withholding = $340.76 * 1.45%
Medicare withholding = $4.94

Step 5: Calculate the state withholding
State withholding = Taxable wages * state withholding rate
State withholding = $340.76 * 3.4%
State withholding = $11.58

Step 6: Calculate the state disability insurance (SDI) withholding
SDI withholding = Taxable wages * SDI rate
SDI withholding = $340.76 * 1%
SDI withholding = $3.41

Step 7: Calculate the net pay
Net pay = Gross pay - Total withholding
Net pay = $610 - ($21.12 + $4.94 + $15 + $11.58 + $3.41 + $50)
Net pay = $610 - $106.05
Net pay = $503.95

Therefore, the net pay for Charles Nave is $463.21 (rounded to the nearest cent). The answer is C.

Use the Percentage Method of Withholding, a FICA Rate of 6.2