6.3 Practice - Income Statements

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1a) Joe makes an hourly wage of $14.10. For hours worked over 40, he is paid at a rate of $21.15 per hour. Last week, Joe worked 45 hours.

1. What is Joe’s gross pay for this pay period?

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1. 1b) What is Joe’s Social Security deduction? Use 6.2% as the Social Security Tax Rate

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1. 1c) What is Joe’s Medicare tax deduction? Use 1.45% as the Medicare tax rate.

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1d) Joe’s other deductions are: federal tax $61.12, state tax $21.03, city tax $6.01, retirement insurance $4.12, disability insurance $1.31, medical insurance $13.05, and dental insurance $5.46. What are Joe’s total deductions for this pay period?

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1e) What is Joe’s net pay for this pay period?

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1f) If Joe pays the same amount for medical insurance each weekly pay period, what is his annual premium?

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1g)Does Joe receive time-and-a-half, double time, or triple time for each hour of overtime?

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2a) Leslie works for Blanck Corporation. His annual salary is $57,285.50.

1. What is Leslie’s annual Social Security deduction?

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2b) What is Leslie’s annual Medicare deduction?

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2c) Leslie is paid every other week. What is his biweekly gross pay?

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2d) Each pay period, Leslie’s employer deducts $418.63 for federal income tax. What percentage of Leslie’s yearly salary is withheld for federal income tax?

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2e) If Leslie is taxed at an annual rate of 3.65% for city tax, how much is deducted from his salary per paycheck for city tax?

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2f) Leslie’s net pay for each pay period is $1,347.34. What percent of his biweekly gross pay is deducted from his salary to yield this net pay amount?

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2g) As of January 1, Leslie will receive a 12.5% raise. What will Leslie’s new annual salary be?

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2h) If the percentage of his biweekly deductions remains the same, what should Leslie’s new net pay be for each pay period?

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3a) Complete the missing entries in the following pay stub.

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3b) What is the Social Security tax for this pay period?

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3c) What is the year-to-date Social Security tax?

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3d) What is the Medicare tax for this pay period?

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3e) What is the year-to-date Medicare tax?

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3f) What are the union dues for this pay period if it is paid weekly?

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3g) What is the year-to-date health insurance contribution if it is paid weekly?

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3h) What is the state tax rate?

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3i) What is the federal tax rate?