During the first week of January, Nathan Mills earned $800. Assume that FICA taxes are 7.65 percent of wages up to $50,000; state unemployment tax is 5.0 percent of wages up to $13,000; and federal unemployment tax is 0.8 percent of wages up to $13,000. Assume that Nathan has voluntary withholdings of $40 (in addition to taxes) and that federal and state income tax withholdings are $72 and $24, respectively. What amount is the check, net of all deductions, that Nathan received for the week's pay?

Question

Quizplus · Accepted Answer

First, we need to calculate the total amount of taxes and withholdings deducted from Nathan's gross pay:
FICA tax: 7.65% of $800 = $61.20
State unemployment tax: 5.0% of $800 (since it's less than $13,000) = $40.00
Federal unemployment tax: 0.8% of $800 (since it's less than $13,000) = $6.40
Voluntary withholdings: $40.00
Federal income tax: $72.00
State income tax: $24.00
Total deductions = $243.60

Now, we can calculate Nathan's net pay:
Gross pay - total deductions = net pay
$800 - $243.60 = $556.40

Therefore, the check that Nathan received for the week's pay is $602.80 (Option A).

During the First Week of January, Nathan Mills Earned $800