An employee earns $6,150 per month working for an employer. The FICA tax rate fo

Question

An employee earns $6,150 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $208 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $176 and contributes $88 to a retirement plan each month. What is the amount of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.) $5,207.53 $5,296.70 $5,158.32 $4,826.22 $4,875.42

Explanation / Answer

The correct answer is Option A i.e. $5,207.53

Particulars Amount Wages Per Month $6,150 Less: Federal Income Taxes Withheld $208            FICA Social Security $381.30            FICA Medicare $89.18            Health Insurance $176            Retirement Plan $88 Net Pay for the employee $5,207.53

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