Question

Juanita receives her paycheck and knows that her gross pay and federal tax are correct. Using the fact that Social Security tax is 6.2% of gross pay, Medicare tax is 1.45% of gross pay and state tax is 19% of federal tax, determine if Juanita's net pay is correct.

Earnings
Deductions

Week Ended
Regular
FED. SOC. MED STATE
WITH. WITH. CARE. WITH.
NET PAY
11/17
$1,020.00
$107.00 $63.24 $14.79 $20.33
$814.64
Choose the true statement below.
a.
The net pay is correct.
b.
The Social Security tax is not correct.
c.
The Medicare tax is not correct.
d.
The state tax is not correct.

Answer 1

a. The net pay is correct.

Checks:
- Social Security = 0.062 × 1020 = 63.24 ✔
- Medicare = 0.0145 × 1020 = 14.79 ✔
- State = 0.19 × 107 = 20.33 ✔

Total deductions = 107 + 63.24 + 14.79 + 20.33 = 205.36
Net pay = 1020 − 205.36 = 814.64 ✔