WorksheetsChapter 2: Understanding Your Paycheck - Chapter Exam Review
Total questions: 25
Worksheet time: 49mins
Use the formula to solve the following:
Formula:
total annual employee benefits = benefit one + benefit two + benefit three
total annual value of job = annual gross pay + total annual employee benefits
Problem:
Diego works part-time as a dog walker, earning $15.25 per hour. He averages 60 hours per month. In addition, his employer gives him a monthly $25 bonus for perfect attendance. What is Diego’s total annual income from this job?
$11,880
$10,980
$11,580
$11,280
Use the formula to solve the following:
Formula:
social security tax= gross pay × tax rate
Problem:
Ben works as a cashier and earns $820 per week. How much Social Security tax will be withheld from Ben’s weekly paycheck?
$53.75
$42.64
$48.10
$50.84
What do Social Security taxes pay for?
Unemployment benefits
Housing assistance
Health insurance for children
Retirement and disability benefits
Use the formula to solve the following:
Formula:
new hourly rate = current hourly rate × (1 + rate of raise) amount of raise per week = (new hourly rate - current hourly rate) × hours worked per week
Problem:
Leo works as a warehouse associate earning $19.25 per hour. He will get a 3% raise. If Leo works 45 hours per week, how much more will he earn per week after his raise?
$27.00
$25.99
$25.50
$24.95
What does FICA stand for?
Federal Insurance Contributions Act
Federal Income and Credit Act
Federal Income Collection Agency
Financial Insurance and Credit Agreement
Dylan has a gross income of $55,000 a year after applying standard deductions. The state income tax rate is 3.2%. Calculate the state income tax Dylan owes for the year.
$1,760
$1,654
$1,632
$1,650
Use the formula to solve the following:
Formula:
percent withheld = total amount of deductions ÷ gross pay × 100
Problem:
James earns a gross pay of $1,025.50 working at a resort. His deductions total $153.83. What percent of his pay is being withheld?
16%
17%
15%
14%
Use the formula to solve the following:
Formula:
percent withheld = total amount of deductions ÷ gross pay × 100
Problem:
Maria works at a clothing store. Her total deductions are $142.20, and her gross pay is $568.80. What percent of Maria’s gross pay is being withheld?
20%
25%
30%
22%
Emily has a gross pay of $1,450. By how much will Emily’s gross pay be reduced if she has the following items withheld?
Federal tax: $112
Social Security tax: 6.2% of her gross pay
Medicare tax: 1.45% of her gross pay
State tax: 15% of her federal tax
$263.90
$239.73
$273.40
$278.48
Use the formula to solve the following:
Formula:
state income tax = gross pay × tax rate
Problem:
John is a freelance writer with a taxable income of $27,500. Using the following tax table, calculate his state income tax:
$620
$560
$650
$480
Use the formula to solve the following:
Formula:
medicare tax = gross pay × tax rate
Problem:
Sophie earns $740 per week. How much Medicare tax will be withheld from Sophie’s weekly paycheck?
$9.67
$12.13
$10.73
$11.12
Use the formula to solve the following:
Formula:
annual value of job = annual gross pay + total annual employee benefits - job expenses
Problem:
Sofia is currently working as a project manager earning $68,900 per year, with a $15 monthly cell phone allowance, and a $45 monthly parking charge.
She has applied for another project manager position that offers an annual salary of $66,800, a $25 monthly cell phone allowance, a $150 monthly travel allowance, and no parking fee.
Which option represents the best choice for Sofia based on the annual monetary value of the jobs?
Accept the new project manager position because it has the higher annual value.
Both positions have the same annual value.
Not enough information to decide.
Stay in her current project manager position because it has the higher annual value.
A statement of an employee’s monthly earnings is given below.
What is the employee’s gross pay?
$4,330.19
$4,230.18
$4,328.76
$4,333.18
Use the formula to solve the following:
Formula:
annual value of job = annual gross pay + total annual employee benefits - job expenses
Problem:
Amira is a graphic designer who earns an annual salary of $57,500. She pays $25 per month for a design software subscription and $15 per month for a professional association membership. What is Amira’s total annual cost for these professional expenses?
$360
$300
$720
$480
Use the formula to solve the following:
Formula:
new hourly rate = current hourly rate × (1 + rate of raise) amount of raise per week = (new hourly rate - current hourly rate) × hours worked per week
Problem:
Ethan works as a delivery driver earning $18.75 per hour. After a great year, he’s receiving a 6% raise. If Ethan works 38 hours per week, how much more will he earn per week after his raise?
$43.50
$42.75
$43.25
$43.00
Use the formula to solve the following:
Formula:
state income tax = gross pay × tax rate
Problem:
Desmond’s state has a 4.35% flat-rate state income tax. If Desmond earns $794.40 per week, how much state income tax will be withheld?
$37.00
$34.56
$33.22
$35.85
Use the formula to solve the following:
Formula:
net pay = gross pay - (federal tax withholdings + social security tax + medicare tax + state income tax withholdings)
Problem:
Maria has a gross pay of $1,400 and federal tax withholdings of $110. Determine Maria’s net pay if she has the following additional items withheld:
Social Security tax: 6.2% of gross pay
Medicare tax: 1.45% of gross pay
$1,170.78
$1,182.90
$1,165.30
$1,159.02
Chloe lives in a state with a 4% flat-rate tax. Her weekly earnings are $644.80. How much state income tax will be withheld from her weekly paycheck?
$26.20
$25.79
$24.32
$27.80
Who does Medicare provide health insurance for?
Only retired government employees
People under 18
Only employed workers
People over 65 and individuals with certain disabilities
Chloe receives her paycheck and confirms that the gross pay and federal tax amounts are correct. Knowing that Social Security tax is 6.2% of gross pay, Medicare tax is 1.45% of gross pay, and state tax is 23% of the federal tax, check whether the net pay on her paycheck is accurate.
Choose the true statement below.
The net pay is correct.
The Medicare tax is not correct.
The state tax is not correct.
The Social Security tax is not correct.
Use the formula to solve the following:
Formula:
total annual employee benefits = benefit one + benefit two + benefit three
total annual value of job = annual gross pay + total annual employee benefits
Problem:
Marisol works as a graphic designer and earns an annual salary of $48,500. Each month, she also receives $50 for Internet expenses and $100 for design software subscriptions. What is the total annual value of Marisol’s job?
$50,300
$51,100
$48,500
$49,800
Use the formula to solve the following:
Formula:
tax savings = premium × tax rate
Problem:
At a 25% federal tax rate, how much does Nita save in federal taxes each month by having $535.25 withheld as a pre-tax deduction?
$535.25
$133.81
$7,740
$267.62
Martha’s gross pay last week was $1,215.60. If the Social Security tax rate is 6.2% of gross pay, how much Social Security tax was withheld from her paycheck?
$7.54
$65.37
$75.40
$75.37
Use the formula to solve the following:
Formula:
tax savings = premium × tax rate
Problem:
Nita earns $7,740 per month. Her monthly health insurance premium is $535.25. If she has this premium withheld before taxes, how does it affect her taxable income?
Her taxable income increases by $535.25
Her employer pays the entire premium, so it has no effect
Her taxable income stays the same
Her taxable income decreases by $535.25
Use the formula to solve the following:
Formula:
net pay = gross pay - (federal tax withholdings + social security tax + medicare tax + state income tax withholdings)
Problem:
Paul has a gross pay of $970 and federal tax withholdings of $88. Determine Paul’s net pay if he has the following additional items withheld:
Social Security tax: 6.2% of gross pay
Medicare tax: 1.45% of gross pay
$807.79
$806.41
$820.10
$815.83
