To determine how federal and state taxes affect an employee's pay based on the provided chart, we need to closely examine the amounts listed and their descriptions:
1. Salary: The starting figure is indicated as [tex]$1106.45.
2. Various taxes are listed as:
- Federal Income Tax: $[/tex]122.67
- Social Security Tax: [tex]$68.60
- Medicare Tax: $[/tex]16.04
- State Income Tax: [tex]$10.33
By analyzing the structure and context:
- Federal Income Tax, Social Security Tax, Medicare Tax, and State Income Tax are specific amounts associated with subtracted deductions.
- These amounts are not being added to the employee's pay, as that would result in a total greater than the salary, but instead, they are amounts deducted from the salary.
When these taxes are subtracted from the gross pay (the initial salary of $[/tex]1106.45),
the result is the net pay which the employee takes home after all deductions.
Therefore, the federal and state taxes, along with Social Security and Medicare taxes, must be:
withheld from the employee pay.
So, the correct answer is:
withheld from employee pay.
