Question

using the information below, calculate each workers net monthly income (nmi). gai is gross annual income, and gmi is gross monthly income. (note: actual state and local tax rates will vary.) a college student, shane works part time for an annual salary of $15,000 a year. gross monthly income (gmi) $ monthly federal income tax (11.6%) $ monthly social security (fica) (6.2%) $ monthly medicare (1.45%) $ monthly state tax (4%) $ monthly local tax (0.1%) $ total monthly deductions $ shane’s net monthly income (nmi) $ question help: video

Explanation:

Step1: Calculate gross monthly income

Divide annual salary by 12.
$\text{GMI} = \frac{15000}{12} = 1250$

Step2: Calculate federal income tax

Multiply GMI by 11.6%.
$\text{Monthly Federal Tax} = 1250 \times 0.116 = 145$

Step3: Calculate Social Security (FICA)

Multiply GMI by 6.2%.
$\text{Monthly FICA} = 1250 \times 0.062 = 77.5$

Step4: Calculate Medicare

Multiply GMI by 1.45%.
$\text{Monthly Medicare} = 1250 \times 0.0145 = 18.125$

Step5: Calculate state tax

Multiply GMI by 4%.
$\text{Monthly State Tax} = 1250 \times 0.04 = 50$

Step6: Calculate local tax

Multiply GMI by 0.1%.
$\text{Monthly Local Tax} = 1250 \times 0.001 = 1.25$

Step7: Sum total monthly deductions

Add all tax amounts together.
$\text{Total Deductions} = 145 + 77.5 + 18.125 + 50 + 1.25 = 291.875$

Step8: Calculate net monthly income

Subtract total deductions from GMI.
$\text{NMI} = 1250 - 291.875 = 958.125$

Answer:

Gross Monthly Income (GMI): $\$1250$
Monthly Federal Income Tax (11.6%): $\$145$
Monthly Social Security (FICA) (6.2%): $\$77.50$
Monthly Medicare (1.45%): $\$18.13$ (rounded to nearest cent)
Monthly State Tax (4%): $\$50$
Monthly Local Tax (0.1%): $\$1.25$
Total Monthly Deductions: $\$291.88$ (rounded to nearest cent)
Shane's Net Monthly Income (NMI): $\$958.12$ (or $\$958.13$ if using unrounded total deductions)