To calculate how much you are allowed in housing expenses per month based on your income, we'll first need to determine your total income, then your net income after tax deductions.
Step 1: Calculate Total Hourly Income
- Wage per hour: $6.80
- Average tips per hour: $2.30
\[ \text{Total hourly income} = \text{Wage per hour} + \text{Tips per hour} = 6.80 + 2.30 = 9.10 \]
Step 2: Calculate Weekly Income
Now multiply the total hourly income by the number of hours worked per week.
\[ \text{Weekly income} = \text{Total hourly income} \times \text{Hours worked per week} = 9.10 \times 20 = 182.00 \]
Step 3: Calculate Monthly Income
Assuming there are approximately 4.33 weeks in a month, we can calculate the monthly income:
\[ \text{Monthly income} = \text{Weekly income} \times 4.33 = 182.00 \times 4.33 \approx 787.06 \]
Step 4: Calculate Deductions
Next, we'll calculate the total deductions from your monthly income.
FICA, Federal Tax, and State Tax Calculation:
- Total deduction percentage: \(7.65% + 8.95% + 6.1% = 22.70%\)
\[ \text{Total deductions} = \text{Monthly income} \times \text{Total deduction percentage} = 787.06 \times 0.227 = 178.24 \]
Step 5: Calculate Net Income
Now, subtract the deductions from your monthly income to find the net income.
\[ \text{Net Income} = \text{Monthly income} - \text{Total deductions} = 787.06 - 178.24 = 608.82 \]
Step 6: Determine Housing Expense Allowance
A common guideline is that 30% of your net income can be allocated for housing expenses.
\[ \text{Allowed housing expenses} = \text{Net Income} \times 0.30 = 608.82 \times 0.30 \approx 182.65 \]
Conclusion
You are allowed approximately $182.65 in housing expenses per month.