# 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 Worldly’s net pay?

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Chapter
Section

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 11, Problem 3PEA
Textbook Problem
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## Employee net payTam 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 Worldly’s net pay?

To determine

Compute Ms. W’s net pay.

### Explanation of Solution

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.

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 note (1):

Calculate withholding social security tax...

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