An employee earns $6,000 per month. The FICA tax rate is 6.2% for Social Security and 1.45% for Medicare. The employee has $200 withheld for federal income tax, contributes $100 to a retirement plan, and pays $120 for health insurance through payroll deductions. The FUTA and SUTA tax rates apply only to the first $7,000 of wages and are paid by the employer, so they do not affect the employee's net pay. What is the employee's net pay for January?

An employee earns $6,000 per month. The FICA tax rate is 6.2% for Social Security and 1.45% for Medicare. The employee has $200 withheld for federal income tax, contributes $100 to a retirement plan, and pays $120 for health insurance through payroll deductions. The FUTA and SUTA tax rates apply only to the first $7,000 of wages and are paid by the employer, so they do not affect the employee's net pay. What is the employee's net pay for January?

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter7: Employee Earnings And Deductions

Section: Chapter Questions

Problem 5E: For tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000...

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