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 juanitas net pay is correct.

earnings	deductions
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.

Explanation:

Step1: Calculate Social Security tax

Social Security tax = 6.2% of gross pay = $0.062 \times 1020.00 = 63.24$

Step2: Calculate Medicare tax

Medicare tax = 1.45% of gross pay = $0.0145 \times 1020.00 = 14.79$

Step3: Calculate state tax

State tax = 19% of federal tax = $0.19 \times 107.00 = 20.33$

Step4: Calculate total deductions

Total deductions = $107.00 + 63.24 + 14.79 + 20.33 = 205.36$

Step5: Calculate net pay

Net pay = Gross pay - Total deductions = $1020.00 - 205.36 = 814.64$

Step6: Verify all values

Compare calculated values to the table: all deductions and net pay match the given amounts.

Answer:

a. The net pay is correct.