Round to the nearest penny. If the answer is 10 dollars, then you will enter 10.00 into the blank.

Your part-time job pays $8.34/hr and your deductions are FICA (7.65%), federal tax withholding (10.25%), and state tax withholding (7.15%). You work for 12 hours. What is your net hourly wage?

1 answer

To calculate your net hourly wage, we need to determine your gross pay for the hours worked, then find the total deductions, and finally subtract those deductions from your gross pay.

  1. Calculate Gross Pay: \[ \text{Gross Pay} = \text{Hourly Wage} \times \text{Hours Worked} = 8.34 , \text{USD/hr} \times 12 , \text{hrs} = 100.08 , \text{USD} \]

  2. Calculate Deductions:

    • FICA: \[ \text{FICA} = 100.08 \times 0.0765 = 7.65582 , \text{USD} \]
    • Federal Tax Withholding: \[ \text{Federal Tax} = 100.08 \times 0.1025 = 10.251 , \text{USD} \]
    • State Tax Withholding: \[ \text{State Tax} = 100.08 \times 0.0715 = 7.15812 , \text{USD} \]
  3. Total Deductions: \[ \text{Total Deductions} = \text{FICA} + \text{Federal Tax} + \text{State Tax} = 7.65582 + 10.251 + 7.15812 = 25.06594 , \text{USD} \]

  4. Calculate Net Pay: \[ \text{Net Pay} = \text{Gross Pay} - \text{Total Deductions} = 100.08 - 25.06594 = 75.01406 , \text{USD} \]

  5. Calculate Net Hourly Wage: \[ \text{Net Hourly Wage} = \frac{\text{Net Pay}}{\text{Hours Worked}} = \frac{75.01406}{12} = 6.25117 , \text{USD} \]

Finally, round the net hourly wage to the nearest penny: \[ 6.25117 \approx 6.25 \]

So, the net hourly wage is 6.25.