In December 2011,B.Rich worked for Payless,Inc.and earned $10,000.Federal income tax withholding is 20%.The FICA rate is 6.2% and the Medicare tax is 1.45%.What is B.Rich's net pay?
A)$10,000
B)$8,000
C)$7,235
D)$6,615

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of federal income tax withholding:
$10,000 x 0.20 = $2,000 (federal income tax withholding)

Next, we need to calculate the amounts for FICA and Medicare taxes:
$10,000 x 0.062 = $620 (FICA tax)
$10,000 x 0.0145 = $145 (Medicare tax)

Now we can subtract the total taxes from B.Rich's gross pay:
$10,000 - $2,000 - $620 - $145 = $7,235

Therefore, B.Rich's net pay is $7,235, which is answer choice C.