Janna is a salaried nonexempt employee in Laramie, Wyoming, who earns $25,000 per year for a...

Janna is a salaried nonexempt employee in Laramie, Wyoming, who earns $25,000 per year for a standard 40-hour workweek and is paid biweekly. She is single with one withholding allowance. During the last pay period, she worked 5 hours of overtime. She contributes 3% of her gross pay to her 401(k) on a pre-tax basis and has a garnishment of 10% of her disposable income for a consumer credit garnishment. What is her net pay? (Use the wage-bracket method. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Group of answer choices

Solutions

Expert Solution

Amounts are in $

1. Gross Earnings per period (biweekly) = 25,000/26 biweeks per year

= 961.54 per biweek

Forsa earnings this week = (961.54/40 hrs) x 45 = 1,081.73

2. Social security tax = 6.2% of Gross earnings

= 6.2% x 1,081.73

= 67.07

3. Medicare taxes = 1.45% of Gross earnings

= 1.45% x 1,081.73

= 15.69

4. Federal Withholding of tax (using wage bracket method)

= 85

Since the year is not given, it is taken as 2019 (1 withholding allowance will give 85, for income of 1,081.73 biweekly)

(This will change if we take the year as 2020 as the rates changed)

5. 401(k) contribution = 3% of Gross earnings

= 3% x 1,081.73

= 32.45

6. Garnishment @10% = 10% ( 1,081.73 -(67.07+15.69+85+32.45) )

= 88.15

7. Net pay = 1,081.73 - 67.07 - 15.69 - 85 - 32.45 - 88.15

= 793.37

Note : Since nothing is given about state withholding tax. It is taken as 0% (as in some states there is no state income withholding tax)

ekkarill92 answered 1 year ago

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