kimberly12184
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Chloe receives her paycheck and knows that her gross pay and federal tax are correct. Using the fact that Social Security tax is [tex]6.2\%[/tex] of gross pay, Medicare tax is [tex]1.45\%[/tex] of gross pay, and state tax is [tex]23\%[/tex] of federal tax, determine if Chloe's net pay is correct.

[tex]\[
\begin{array}{|c|c|cccc|c|}
\hline
& \text{Earnings} & & \multicolumn{5}{c|}{\text{Deductions}} & \\
\hline
\text{Week Ended} & \text{Regular} & \text{FED.} & \text{SOC.} & \text{MED.} & \text{STATE} & \text{NET PAY} \\
& & \text{WITH.} & \text{WITH.} & \text{CARE} & \text{WITH.} & \\
\hline
\$ / 10 & \$ 856.00 & \$ 80.00 & \$ 53.07 & \$ 12.41 & \$ 18.40 & \$ 692.12 \\
\hline
\end{array}
\][/tex]

Choose the true statement below.

a. The net pay is correct.
b. The Social Security tax is not correct.
c. The Medicare tax is not correct.
d. The state tax is not correct.

Please select the best answer from the choices provided.



Answer :

GinnyAnswer
Let's break down the solution step by step to verify Chloe's net pay.

Given Information:

- Earnings (Gross Pay): [tex]$856.00 - Federal Withholding: $[/tex]80.00
- Social Security Tax: [tex]$53.07 - Medicare Tax: $[/tex]12.41
- State Tax: [tex]$18.40 - Net Pay: $[/tex]692.12

Deductions Calculations:

1. Social Security Withholding:
- Social Security tax rate = [tex]$6.2\%$[/tex]
- Calculation: [tex]$856.00 \times 0.062 = 53.072$[/tex]

2. Medicare Withholding:
- Medicare tax rate = [tex]$1.45\%$[/tex]
- Calculation: [tex]$856.00 \times 0.0145 = 12.412$[/tex]

3. State Tax Withholding:
- State tax rate = [tex]$23\%$[/tex] of Federal Withholding
- Calculation: [tex]$80.00 \times 0.23 = 18.40$[/tex]

Net Pay Calculation:
- Gross Pay: [tex]$856.00 - Total Deductions: - Federal Withholding: $[/tex]80.00
- Social Security Withholding: [tex]$53.072 - Medicare Withholding: $[/tex]12.412
- State Tax Withholding: [tex]$18.40 - Calculation: - $[/tex]856.00 - (80.00 + 53.072 + 12.412 + 18.40) = 692.116[tex]$ Chloe's net pay should be $[/tex]692.116. Since the provided net pay [tex]$692.12$[/tex] is very close to the computed value and the difference is within a small rounding error (less than a cent), we can consider the net pay given as correct.

Conclusion:

- The net pay is correct.

Therefore, the correct answer from the choices provided is:

a. The net pay is correct.

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