To determine if Chloe's net pay is correct, we need to verify the amount calculated for each deduction and then compute the actual net pay. Here are the steps to do that:
1. Calculate Social Security Tax:
[tex]\[
\text{Social Security Tax} = \text{Gross Pay} \times 6.2\%
\][/tex]
Given:
[tex]\[
\text{Gross Pay} = \$856.00
\][/tex]
[tex]\[
\text{Social Security Tax} = 856 \times 0.062 = 53.072
\][/tex]
2. Calculate Medicare Tax:
[tex]\[
\text{Medicare Tax} = \text{Gross Pay} \times 1.45\%
\][/tex]
[tex]\[
\text{Medicare Tax} = 856 \times 0.0145 = 12.412
\][/tex]
3. Calculate State Tax:
[tex]\[
\text{State Tax} = \text{Federal Tax} \times 23\%
\][/tex]
[tex]\[
\text{Federal Tax} = \$80.00
\][/tex]
[tex]\[
\text{State Tax} = 80 \times 0.23 = 18.400
\][/tex]
4. Calculate Total Deductions:
[tex]\[
\text{Total Deductions} = \text{Federal Tax} + \text{Social Security Tax} + \text{Medicare Tax} + \text{State Tax}
\][/tex]
[tex]\[
\text{Total Deductions} = 80 + 53.072 + 12.412 + 18.400 = 163.884
\][/tex]
5. Calculate Net Pay:
[tex]\[
\text{Net Pay} = \text{Gross Pay} - \text{Total Deductions}
\][/tex]
[tex]\[
\text{Net Pay} = 856 - 163.884 = 692.116
\][/tex]
Comparing these calculated values to those reported:
- Social Security Tax Reported: \[tex]$53.07 (Reported) vs \$[/tex]53.072 (Calculated)
- Medicare Tax Reported: \[tex]$12.41 (Reported) vs \$[/tex]12.412 (Calculated)
- State Tax Reported: \[tex]$18.40 (Reported) vs \$[/tex]18.400 (Calculated)
- Net Pay Reported: \[tex]$692.12 (Reported) vs \$[/tex]692.116 (Calculated)
From these comparisons, we see that the values mostly match closely, except for minor differences due to rounding. However, focusing on the significant digits:
- The Social Security tax discrepancy is more noticeable.
Therefore, the true statement is:
b. The Social Security tax is not correct.
