Assume you’ve taken a job that pays $15 an hour. You will work 20 hours a week and be paid every two weeks. Perform online research to determine your tax liability. Describe your paycheck deductions and calculate each amount to arrive at your final net pay.

Net Bi weekly pay is $519

Explanation:

Calculation of weekly pay

Given

No of hours 20

Per hour pay $15

Weekly pay = 15 x 20

=$300

Payment received is bi weekly so it is $600 for two weeks.

Calculation of bi weekly net pay

Federal income tax rate    (600 x  4.87%)                $29

State income tax rate         (570 x   1.04%)                $6

FICA and state insurance taxes (564 x 7.65%)         $46

Total deductions                                                          $81

Net pay = Bi weekly salary - deductions

=600-81

=$519

Net Bi weekly pay or take home after deductions is $519

FOR PLATO USERS.

I earn $15 per hour for 20 hours a week, I will earn $15,600 yearly. I can claim my exemptions as noted on my W-4 form. The Internal Revenue Service announces the allowances per exemptions every year. The current allowance for one exemption for a single person is $3,950. For a spouse, I can claim another exemption of $3,950. I can also claim exemptions for any dependents at $3,950 each.

Suppose my contribution to a 401(k) retirement plan is 10 percent:

$15,600 – $1,560 = $14,040

I am single, so I claimed one exemption on my W-4 form, which I submitted to my employer:

$14,040 – $3,950 = $10,090

Thus, my gross income (minus exemptions and deductions) is $10,090.

Now I will calculate the federal income tax, Social Security, and other withholdings based on $10,090. My employer withholds money for federal tax, Social Security tax, and Medicare tax. The federal income tax brackets for 2015 are as follows:

Tax RateTaxable Income Levels

10%$0–$9,225

15%$9,226–$37,450

25%$37,451–$90,750

28%$90,751–$189,300

33%$189,301–$411,500

35%$411,501–$413,200

39.60%  

Above $413,200

The tax bracket for my income is 15 percent. However, I am not taxed 15 percent on the entire amount. I will be taxed 10 percent for the first $9,225 dollars earned. Then, I will be taxed 15 percent on the remaining amount:

10 percent of 9,225 = $922.50

15 percent of ($10,090 – $9,225) = $129.75

Total income tax = $1,522.25

Thus, my income minus federal tax ($10,090 – $1,522.25) is $9,037.75.

The Social Security tax is 6.2 percent, and the Medicare tax is 1.45 percent. These taxes are calculated based on my gross income:

6.2 percent of $15,600 = $967.20

1.45 percent of $15,600 = $226.20

Thus, my net pay will be: $9,037.75 – (967.20 + 226.20) = $7,844.35.