Imagine someone makes $42,000 a year and receives two paychecks per month. The employer withholds 22% of that in federal income tax. What is the amount of each paycheck after federal income tax has been taken out?

Respuesta :

Answer:  1365 dollars

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Explanation:

The person makes $42,000

They're taxed at a rate of 22%, so 0.22*(42,000) = 9,240 dollars is paid in annual tax. So they get to take home 42,000 - 9,240 = 32,760

Put another way, they must pay 22% of their yearly earnings, so they keep 100% - 22% = 78% of their money. Then note how

78% of 42,000 = 0.78*(42,000) = 32,760

So there are two ways to arrive at the same figure of $32,760 which is the annual salary after taxes.

We'll divide this over 24 because there are 12 months in a year, and the person is paid twice a month, so over the full year they are paid 12*2 = 24 times.

So each paycheck after tax is (32,760)/24 = 1365 dollars

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If you want, you can divide the original value by 24 first, then apply the tax later.

(42,000)/24 = 1750 dollars per paycheck before tax

0.78*1750 = 1365 dollars per paycheck after tax

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