Question

Padraig receives total employment compensation of $70,000 and had $2,000 in job expenses. Which of the following could be true about Padraig’s gross pay and total employee benefits?
a.
His total employee benefits are 2.8% of his annual gross pay of $72,000.
b.
His total employee benefits are 2.9% of his annual gross pay of $68,000.
c.
His total employee benefits are 12.5% of his annual gross pay of $64,000.
d.
His total employee benefits are 13.3% of his annual gross pay of $60,000.

Answer 1

Total employment compensation (gross pay + benefits) plus job expenses = $70,000 + $2,000 = $72,000. So benefits = $72,000 − gross pay.

Check each choice:
- (a) 72,000 → benefits = 0 → 0% (not 2.8%)
- (b) 68,000 → benefits = 4,000 → 4,000/68,000 = 5.88% (not 2.9%)
- (c) 64,000 → benefits = 8,000 → 8,000/64,000 = 12.5% ✓
- (d) 60,000 → benefits = 12,000 → 12,000/60,000 = 20% (not 13.3%)

So (c) is correct.