Jeff Jones earns $1,200 per week. He is married and claims four withholding allowances. The Social Security rate is 6.2% on $128,400, and Medicare is 1.45%. Each paycheck, his employer also deducts $42.50 for health insurance. What is his net pay? (Calculate FIT by percentage method.) (Round your intermediate calculations and final answer to the nearest cent.)
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To calculate Jeff Jones' net pay, we need to calculate the various deductions from his gross pay.
1. Calculate the Social Security deduction:
- The Social Security rate is 6.2% on $128,400 maximum per year.
- Since Jeff earns $1,200 per week, his annual earnings would be $1,200 * 52 = $62,400.
- The maximum amount subject to the Social Security tax is $62,400 since it is below the $128,400 limit.
- The Social Security deduction is 6.2% of $62,400.
- Therefore, the annual Social Security deduction is $62,400 * 0.062 = $3,868.80.
- Since Jeff is paid weekly, we need to divide the annual deduction by 52: $3,868.80 / 52 = $74.40 (rounded to the nearest cent).
2. Calculate the Medicare deduction:
- The Medicare rate is 1.45% of the entire income.
- The Medicare deduction is 1.45% of $1,200.
- Therefore, the weekly Medicare deduction is $1,200 * 0.0145 = $17.40 (rounded to the nearest cent).
3. Deduct the health insurance premium:
- Each paycheck, Jeff's employer deducts $42.50 for health insurance.
Now, let's calculate Jeff Jones' net pay:
Gross pay: $1,200
Social Security deduction: $74.40
Medicare deduction: $17.40
Health insurance premium: $42.50
Net pay = Gross pay - (Social Security deduction + Medicare deduction + health insurance premium)
Net pay = $1,200 - ($74.40 + $17.40 + $42.50)
Net pay = $1,200 - $134.30
Net pay = $1,065.70
Therefore, Jeff Jones' net pay is $1,065.70.
Q=Jeff Jones earns $1,200 per week. He is married and claims four (4) withholding allowances. The FICA rate is as follows: Social Security rate is 6.2% on $97,500; Medicare rate is 1.45%. To date his cumulative wages are $6,000. Each pay check, his employer also deducts $42.50 for the health Insurance. What is his net pay? (Calculate FIT by percentage method)
Gross earnings $1,200 weekly
Total deductions = $42.50 Health insurance
+1.45% of weekly salary=1.45%=0.0145*1,200=17.40
+6.2%=0.062X1200=74.40 Social Security
=42.50+17.40+74.40=$134.30
FIT = $17.40+74.40*2=$183.60
Answer: Net pay = $1,200-$134.30=$1,065.70