Question

Vaughan company has 1 employee who worked 40 hours in the first week of the year....

Vaughan company has 1 employee who worked 40 hours in the first week of the year. Susie, the employee, makes $10 per hour. Assume that federal taxes are withheld at 10%, state tax at 8%, and FICA social security taxes are 6.2% and Medicare is taxed at 1.45%. Further assume that FUTA is taxed at 0.8% and SUTA at 5.4% up to the first $7,000 of wages. Insurance premiums are $80 per week. Vaughan pays 70% and Susie pays 30% of the premiums. What is Susie's net pay for the week?

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Answer #1

Answere to question is as follows

Total Earning for week by Susie is = (40*10) = $400

Taxes payble by susie and deductible her paycheck

  1. Federal Taxes
  2. State Tax
  3. Fica social security taxes and medicare

Note:

FUTA and SUTA are not deductible since these are employer liablilities.

Calculation of total taxes to be deducted:

  1. Fedral Tax = 400*10% =$40
  2. State Tax =400*8% = $32
  3. Fica Social Society taxes= 400*6.2%=$24.8
  4. Medicare =400*1.45%=$5.8

Premium payable buy Susie 80*30%=$24

So,total amount deducted from susie pay= 40+32+24.8+5.8+24= 126.6

Net pay for week to susie is= 400-126.6= $273.4

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