Question

You have a second job that pays $8.50/hr and your deductions are FICA (7.65%), federal tax withholding (11.25%), and state tax withholding (7.25%). If you want to save $220.00/month, how many hours do you need to work at your second job? (Remember to round up to the nearest whole hour.)

Answer 1

To determine how many hours you need to work at your second job to save $220.00 a month, follow these steps:

1. **Calculate the total deduction percentage**:
- FICA: 7.65%
- Federal Tax: 11.25%
- State Tax: 7.25%

Total deductions = 7.65% + 11.25% + 7.25% = 26.15%

2. **Calculate the take-home pay rate**:
The take-home pay rate can be calculated as follows:
\[
\text{Take-home rate} = \text{Hourly rate} \times (1 - \text{Total deductions})
\]
Substituting the hourly rate of $8.50/hr:
\[
\text{Take-home rate} = 8.50 \times (1 - 0.2615) = 8.50 \times 0.7385 \approx 6.272125
\]
Rounding this to two decimal places, the take-home pay per hour is approximately $6.27.

3. **Calculate the total amount needed to save $220 after deductions**:
Since you want to save $220.00, you will need to calculate how many hours are required to take home that amount:
\[
\text{Hours needed} = \frac{\text{Savings goal}}{\text{Take-home rate}} = \frac{220.00}{6.27} \approx 35.04
\]

4. **Round up to the nearest whole hour**:
Since you cannot work a fraction of an hour and need to round up,
\[
\text{Hours needed} = 36
\]

Therefore, you need to work **36 hours** at your second job to save $220.00 a month.