Question

4. Mary takes a full-time position that pays a salary of $64,500 per year. a) What is her pre-tax monthly income? b) The government takes out 6.2% for Social Security, 1.45% for Medicare, and 15% for federal income tax. She does not live in a state with state income tax. What is her after-tax monthly income? 5. Scott takes a full-time position that pays an hourly wage of $28. The job assumes that he will work five 8-hour days a week. Use the tax info in #4. a) What is his gross annual income? b) What is his gross monthly income? Assume four weeks in a month c) What is his after-tax monthly income? 6. Steven takes a sales job that pays 5.25% commission. He typically sells $86,000 worth of merchandise per month.a) What is his gross annual income? b) What is his gross monthly income? c) What is his after-tax monthly income?

Answer 1

$\begin{gathered} For\text{ Mary} \\ a) \\ 1\text{ year has 12 months} \\ monthly\text{ income=}\frac{\text{\ 64,500}}{12} \\ monthly\text{ income is \ 5,375 } \\ \\ b) \\ SS=6.2\text{ \%=0.062} \\ Medicare=1.45\text{ \%=0.0145} \\ Tax=0.062+0.0145 \\ Tax=0.0765 \\ After\text{ tax income=\ 5,375\lparen1-0.0765\rparen } \\ After\text{ tax income=\ 4,963.8} \\ The\text{ after tax monthly income is \ 4,963.8} \\ \\ For\text{ Scott} \\ a) \\ he\text{ works 8 hour per day} \\ He\text{ works 5 days per week} \\ one\text{ month has 4 weeks} \\ one\text{ year has 12 months} \\ Hence \\ Gross\text{ annual income=\lparen\ 28\rparen\lparen8\rparen\lparen5\rparen\lparen4\rparen\lparen12\rparen} \\ Gross\text{ annual income=\ 53,760} \\ \text{The gross annual income is \ 53,760} \\ \\ b) \\ Gross\text{ monthly income=\lparen\ 28\rparen\lparen8\rparen\lparen5\rparen\lparen4\rparen} \\ Gross\text{ monthly income=\ 4,480} \\ The\text{ gross monthly income is \ 4,480} \\ \\ c) \\ SS=6.2\text{\operatorname{\%}=0.062} \\ Med\imaginaryI care=1.45\operatorname{\%}\text{=0.0145} \\ Tax=0.0765 \\ After\text{ tax }\imaginaryI\text{ncome=}\operatorname{\ }4,480\operatorname{\lparen}\text{1-0.0765}\operatorname{\rparen} \\ After\text{ tax income=\ 4,137.3} \\ The\text{ after tax income is \ 4,1373} \\ \\ \text{For Steven} \\ a) \\ Gross\text{ annual income=\lparen\ 86,000\rparen\lparen0.0525\rparen\lparen12\rparen} \\ Gross\text{ annual income=\ 54,180} \\ The\text{ gross annual income is \ 54,180} \\ \\ b) \\ Gross\text{ monthly income=\lparen86,000\rparen\lparen0.0525\rparen} \\ Gross\text{ monthly income=\ 4,515} \\ \text{The gross monthly income is \ 4,515} \\ \\ c) \\ SS=6.2\text{\operatorname{\%}} \\ Med\imaginaryI care=1.45\operatorname{\%} \\ Tax=0.0765 \\ After\text{ tax }\imaginaryI\text{ncome=}\operatorname{\ }4,515(1-0.0765) \\ After\text{ tax }\mathrm{i}\text{ncome=}\operatorname{\ }4,169.6 \\ The\text{ after tax income is \ 4,169.6} \end{gathered}$