To determine how much you are allowed in housing expenses per month, we first need to calculate your total earnings per week, deduct taxes, and then figure out what portion of your income you can allocate to housing expenses.
Step 1: Calculate Weekly Earnings
Hourly Wage:
- Base pay: $5.87/hr
- Tips: $3.20/hr
- Total pay per hour: \(5.87 + 3.20 = 9.07\)
Total Weekly Earnings:
- Hours worked: 21 hours/week
- Total earnings per week: \[ 21 \text{ hours/week} \times 9.07 \text{ $/hr} = 190.47 \text{ $/week} \]
Step 2: Calculate Weekly Deductions
Deductions:
- FICA: \(7.65%\)
- Federal: \(8.9%\)
- State: \(5.6%\)
Total Tax Rate: \[ 7.65% + 8.9% + 5.6% = 22.15% \] Total Weekly Deductions: \[ \text{Total deductions} = 190.47 \times 0.2215 \approx 42.16 \text{ $} \]
Step 3: Calculate Net Weekly Earnings
Net Weekly Earnings: \[ \text{Net Earnings} = 190.47 - 42.16 \approx 148.31 \text{ $/week} \]
Step 4: Calculate Monthly Net Income
To find the monthly income, multiply the weekly net income by the number of weeks in a month (approximately 4.33). \[ \text{Monthly Net Income} = 148.31 \times 4.33 \approx 641.31 \text{ $/month} \]
Step 5: Determine Housing Expenses
A common rule of thumb is to allocate about 30% of your net income toward housing expenses. \[ \text{Allowed Housing Expense} = 641.31 \times 0.30 \approx 192.39 \text{ $/month} \]
Conclusion
You are allowed approximately $192.39 for housing expenses per month.