Question

The Porters are moving because Mr. Porter got a new job. Until Mrs. Porter finds a job in the new city, the Porter family will live on Mr. Porter’s salary. In the new city, his gross pay is $7,500 per month. His deductions include the following:

Federal income tax      $1,400
State income tax       $535
Social Security        $415
Medicare          $150

What is Mr. Porter’s net pay each month?
5,000
6,100
6,500
7,500

Answer 1

Since in total the cost of all the taxes Mr. Porter pays is $2500 you subtract that from his monthly $7500 salary and get $5000 as his net pay or overall pay for the month.

Answer 2

Mr. Porter’s net pay each month is $5,000

• The calculation is as follows:

= Gross pay for the month - all deductions

= $7,500 - ($1,400 + $535 + $415 + $150)

= $7,500 - $2,500

= $5,000

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