Ken Jenkins earns $75,000 per year. What is her net pay for the month ended January 31, if FICA tax rates are: 6.2% for OASDI and 1.45% for Medicare; federal income tax is 20%; and union dues are $400 per month? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole dollar.)

A) $4,522
B) $4,122
C) $5,850
D) $5,372

Question

Jenna Halstead · Accepted Answer

Final Answer : B, Explanation :  Ken Jenkins' monthly gross pay is $75,000 / 12 = $6,250. The FICA taxes are calculated as follows: OASDI is 6.2% of $6,250, which equals $387.50, and Medicare is 1.45% of $6,250, which equals $90.63. The total FICA tax is $387.50 + $90.63 = $478.13. The federal income tax is 20% of $6,250, which equals $1,250. After subtracting FICA taxes, federal income tax, and union dues ($400) from the gross pay, the net pay is $6,250 - $478.13 - $1,250 - $400 = $4,121.87, which rounds to $4,122.

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