27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Employee net pay

Tam Worldly’s weekly gross earnings for the week ended April 22 were $2,000, and her federal income tax withholding was $372.02. Assuming that the social security rate is 6$ and Medicare is 1.5% of all earnings, what is Worldy’s net pay?

To determine

Gross pay: The total amount such as salary, wages, commissions, overtime, and bonus paid by the employer to an employee in each pay period is called as gross pay.

Net pay: It is the remaining amount of gross pay after all deductions.

To compute: Compute Ms. W’s net pay.


Calculate Ms. W’s net pay as below:

Particulars Amount Amount
Gross pay $2,000.00
Withholding deductions:
Federal income tax $372.02
Social security tax(1) $120.00
Medicare tax(2) $30.00
Total withholding deductions $522.02
Net pay (take-home) $1,477.98

Table (1)

Working notes:

Calculate withholding social security tax...

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