Question

A paycheck is issued for $329.40. the paystub reflects an amount earned of $400.00, medicare tax of $5.80, social security tax of $24.80, and a federal tax of $40.00. what is the net income for the paycheck? $400.00 $329.40 $40.00 $24.80

Answer 1

After deducting all expenses from the total income, the net income is $329.40

A pay stub is a paper (or a digital record) delivered to an employee with each paycheck that shows the amount of money earned (gross or total income) and the amount deducted for insurance, taxes, and so on.

Net income is the amount earned by an individual or business after deducting costs, taxes and allowances.

Net income = Gross income - Total expenses

In the given problem, $400.00 is the gross income.

The expenses are:

• Medicare tax: $5.80
• Security tax: $24.80
• Federal tax: $40.00

The total expenses = $5.80 + $24.80 + $40.00 = $70.60

Hence,

Net income = $400.00 - $70.60 =  $329.40

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