Question

Your gross pay is $1,935.00. Your involuntary deductions are FICA (7.65%), federal withholding (13%), and state withholding (9%). How much are you allowed for housing and additional debt payments?
Responses

$541.80
$541.80 - no response given

$381.16
$381.16 - no response given

$490.06
$490.06 - no response given

$696.60
$696.60 - no response given

Answer 1

First find net pay after involuntary deductions:
Total deductions = 7.65% + 13% + 9% = 29.65%
Net pay = 1935 × (1 − 0.2965) = 1935 × 0.7035 = $1,361.27

Allowed for housing + additional debt = 36% of net:
0.36 × 1,361.27 = $490.06

Answer: $490.06