To calculate the take-home pay after taxes, you can start by determining the amount of taxes deducted from the gross pay.
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Start with the gross pay: \[ \text{Gross Pay} = $1,325 \]
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Calculate the tax amount using the tax rate: \[ \text{Tax Rate} = 12.5% = 0.125 \] \[ \text{Tax Amount} = \text{Gross Pay} \times \text{Tax Rate} = $1,325 \times 0.125 = $165.625 \]
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Now, subtract the tax amount from the gross pay to find the take-home pay: \[ \text{Take-Home Pay} = \text{Gross Pay} - \text{Tax Amount} = $1,325 - $165.625 \] \[ \text{Take-Home Pay} = $1,159.375 \]
Rounding to two decimal places, the take-home pay is: \[ \text{Take-Home Pay} \approx $1,159.38 \]
Thus, the correct answer is: \[ \boxed{$1,159.38} \]