Fran Molley is married, claims five withholding allowances, and earned 3,500 gross per month in edition to federal income tax, social security, and Medicare withholding , Fran pay 2.1% state income tax, and 1/2% for state disability insurance ( both based on her gross income), plus an additional 43.11 for life insurance and 72.30 to the credit union. As payroll manager for Fran's company, calculate her net take home pay per month.
To calculate Fran Molley's net take-home pay per month, we need to subtract all the deductions mentioned from her gross income. Here are the steps to calculate her net pay:
Step 1: Calculate Federal Income Tax withholding
The federal income tax withholding depends on several factors such as filing status, total income, and allowances claimed. Fran claims five withholding allowances, but we don't have enough information to accurately calculate the amount. The IRS provides a withholding tax calculator that can be used to determine the exact amount based on Fran's specific circumstances. You can visit the IRS website and use their "IRS Withholding Calculator" for this step.
Step 2: Calculate Social Security and Medicare withholding
Social Security withholding is traditionally 6.2% of gross income, and Medicare withholding is typically 1.45% of gross income. These percentages are standard, so we can calculate these amounts directly.
Social Security withholding: 6.2% * $3,500 = $217
Medicare withholding: 1.45% * $3,500 = $50.75
Step 3: Calculate State Income Tax withholding
Fran's state income tax withholding is calculated based on the gross income and the given rate of 2.1%.
State Income Tax withholding: 2.1% * $3,500 = $73.50
Step 4: Calculate State Disability Insurance withholding
Fran's state disability insurance withholding is calculated based on the gross income and the given rate of 0.5%.
State Disability Insurance: 0.5% * $3,500 = $17.50
Step 5: Subtract additional deductions
Fran has two additional deductions: $43.11 for life insurance and $72.30 for the credit union.
Total additional deductions: $43.11 + $72.30 = $115.41
Step 6: Calculate net take-home pay
To calculate the net take-home pay, subtract all the deductions from the gross income:
Net Take-Home Pay = Gross Income - (Federal Income Tax + Social Security + Medicare + State Income Tax + State Disability Insurance + Additional Deductions).
Use the values we calculated in the previous steps:
Net Take-Home Pay = $3,500 - (Federal Income Tax + $217 + $50.75 + $73.50 + $17.50) - $115.41
Please refer to Step 1 to calculate the exact amount for Federal Income Tax withholding. Once you have that number, you can substitute it into the formula to get the final net take-home pay for Fran Molley.