Fran Mallory is married, claims five withholding allowances, and earns $3,500 (gross) per month. In addition to Federal income tax (FIT), social security, and Medicare withholding, Fran pays 2.1% state income tax, and ½% 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.

Question

Fran Mallory is married, claims five withholding allowances, and earns $3,500 (gross) per month. In addition to Federal income tax (FIT), social security, and Medicare withholding, Fran pays 2.1% state income tax, and ½% 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.

Answer 1

To calculate Fran Mallory's net take-home pay per month, we need to deduct the various taxes and deductions from her gross income. Let's break it down step by step:

1. Start with Fran's gross income:
Gross Income = $3,500 per month

2. Calculate Federal Income Tax (FIT) withholding:
To determine the FIT withholding, you need to know the tax brackets and rates applicable to Fran's income. Unfortunately, you haven't provided that information. You can refer to the IRS website or consult a tax professional to determine the FIT withholding based on Fran's income and filing status.

3. Calculate Social Security and Medicare withholding:
Social Security withholding is 6.2% of Fran's gross income, while Medicare withholding is 1.45% of her gross income. These percentages stay constant regardless of the income level.
Social Security Withholding = Gross Income * 6.2%
Medicare Withholding = Gross Income * 1.45%

4. Calculate State Income Tax:
State Income Tax is based on Fran's gross income and the applicable tax rate, which is 2.1% in this case.
State Income Tax = Gross Income * 2.1%

5. Calculate State Disability Insurance:
State Disability Insurance is also based on Fran's gross income, with a rate of 0.5%.
State Disability Insurance = Gross Income * 0.5%

6. Deduct additional deductions:
Fran also pays $43.11 for life insurance and $72.30 to the credit union.

Now, subtract all of these deductions from Fran's gross income to get her net take-home pay per month:
Net Pay = Gross Income - Federal Income Tax - Social Security Withholding - Medicare Withholding - State Income Tax - State Disability Insurance - Life Insurance - Credit Union Deduction

Please note that without the specific information about Fran's tax brackets and rates, it is not possible to provide an exact calculation for her net pay.