Take-Home Pay and Cost of Living

Key Terms:

Median annual wage (salary): What the average worker might make in one year, after about 20 years of experience in that career.
Annual take-home pay: What a worker earns in one year, after taxes have been deducted. For this portfolio, we will assume a 30% tax rate, meaning 70% of the annual wage is take-home pay.


For example, an MRI tech with a salary of $77,360 would expect to take home about $54,152 per year.

(Annual pay before taxes * 0.7 = amount of take-home pay.)

Question 1
If someone earns an annual salary of $70,000 and pays 30% in taxes, what would their annual take-home pay be?(1 point)
Responses

$70,000
$70,000

$49,000
$49,000

$40,000
$40,000

$21,000
$21,000
Living Wage
Angel used the following page to research the "living wage" for different family situations in the state of Florida

If there are children in a household, these examples assume:

If there is 1 adult working and 1 adult not working, one adult earns all the income while the other provides care for any children (no childcare expenses).
If there are 2 adults working, the "wage" is what each one of them earns. They each pay for half of the childcare expenses.
If there is only 1 adult, that adult pays childcare expenses for any children.
Question 2
If Angel earns $17.00 per hour as a home health aide, for which family situation would this be considered a living wage?(1 point)
Responses

1 adult, 0 children
1 adult, 0 children

1 adult, 2 children
1 adult, 2 children

1 adult working, 1 adult not working, 0 children
1 adult working, 1 adult not working, 0 children

2 adults working, 0 children
2 adults working, 0 children
Question 3
If Angel lives in a household with 2 working adults and 2 children, which of these salaries provides pay equal to or above a living wage?(2 points)
Responses

Home health aide: $17/ hour
Home health aide: $17/ hour

Sonographer: $38 / hour
Sonographer: $38 / hour

Physical Therapist: $48/ hour
Physical Therapist: $48/ hour
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1 answer

Let's break down each question based on the information provided.

Question 1: If someone earns an annual salary of $70,000 and pays 30% in taxes, to find their annual take-home pay, we would calculate it as follows:

\[ \text{Take-home pay} = \text{Annual salary} \times (1 - \text{tax rate}) \] \[ \text{Take-home pay} = 70,000 \times (1 - 0.30) = 70,000 \times 0.70 = 49,000 \]

So, the correct response is $49,000.


Question 2: To determine if $17.00 per hour is considered a living wage, we would need to compare that wage to the living wage thresholds for different family situations.

Calculating the annual salary based on $17.00 per hour: \[ \text{Annual salary} = 17 \text{ dollars/hour} \times 40 \text{ hours/week} \times 52 \text{ weeks/year} = 17 \times 2080 = 35,360 \]

Next, we consider which family situation would classify $35,360 as a living wage. Commonly, single adults without children earn less than the living wage threshold because they do not incur childcare costs. As such, $17/hour would likely be adequate for:

  • 1 adult, 0 children, as they have no childcare expenses to consider.

Therefore, the appropriate response is 1 adult, 0 children.


Question 3: For Angel living in a household with 2 working adults and 2 children, we need to check which of the provided salaries would meet or exceed a living wage.

Given the previously calculated salary of $35,360 per year for Angel as a home health aide at $17/hour, we check the other two options:

  1. Sonographer: $38/hour \[ \text{Annual salary} = 38 \times 40 \times 52 = 38 \times 2080 = 79,040 \]

  2. Physical Therapist: $48/hour \[ \text{Annual salary} = 48 \times 40 \times 52 = 48 \times 2080 = 99,840 \]

Both the sonographer and the physical therapist earn significantly more than the living wage threshold.

Thus, the salaries that provide pay equal to or above a living wage for the household with 2 working adults and 2 children are:

  • Sonographer: $38/hour
  • Physical Therapist: $48/hour

Therefore, the answers to Question 3 are Sonographer: $38/hour and Physical Therapist: $48/hour.