PE 11-3B Employee net pay

John Wolfe’s weekly gross earnings for the week ending September 5 were $2,200, and his federal income tax withholding was $444.88. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Wolfe’s net pay?

Answer:

Total wage payment...........................................  $2,200.00 Less: Federal income tax withholding.............  $444.88  Earnings subject to social security tax  $2,200.00   Social security tax rate ........................... ×         6%   Social security tax...................................  132.00  Medicare tax ($2,200 × 1.5%)..................   33.00  609.88 Net pay................................................................  $1,590.12 

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