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10 April, 13:27

Mike Kohl, an employee of Spotswood Company, has gross earnings for the month of October of $8,000. FICA taxes are 8% of gross earnings, federal income taxes amount to $1,270 for the month, state income taxes are 2% of gross earnings, and Mike authorizes voluntary deductions of $20 per month to the United Fund. What is the net pay for Mike Kohl?

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  1. 10 April, 13:36
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    Net pay 5,910

    Explanation:

    From the gross earnings we need to subtract each concept to get the net pay.

    gross earnings 8,000

    FICA 8% of 8,000 (640)

    federal income (1,270)

    state 2% of 8,000 (160)

    United Fund (20)

    Net pay 5,910

    That is October's cash amount Mike will receive for his salary

    Key-terms

    Gross pay: the salary beofre any deduction

    Net-pay the salary payable to Mike in cash.

    the diference is withold to cover taxes and volunteer deduction like union, ihealth insurance, and other.
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