Daniels is considering two job offers: a full-time permanent position that pays $78,000 annually and a full-time contract job that pays $40 per hour. The following information is used for calculating income, taxes, and costs. The contract job is self-employment, which is taxed an additional 7.65% of gross income. The U. S. government deducts Social Security (6.2%) and Medicare (1.45%). Daniels will deduct 15% of gross income to cover federal income tax. Daniels does not live in a state with state income tax. The permanent position will cost you $95 per month in health care benefits and 4% of your after-tax income in retirement contributions. The contract job will cost you $150 per month in health care benefits and 8% of your after-tax income in retirement contributions. Which job has a larger gross annual income?

A. Same gross annual income

B. Contract job

C. Full-time position

Question

Gabrielle Weber

Mathematics

11 October, 04:17

Daniels is considering two job offers: a full-time permanent position that pays $78,000 annually and a full-time contract job that pays $40 per hour. The following information is used for calculating income, taxes, and costs. The contract job is self-employment, which is taxed an additional 7.65% of gross income. The U. S. government deducts Social Security (6.2%) and Medicare (1.45%). Daniels will deduct 15% of gross income to cover federal income tax. Daniels does not live in a state with state income tax. The permanent position will cost you $95 per month in health care benefits and 4% of your after-tax income in retirement contributions. The contract job will cost you $150 per month in health care benefits and 8% of your after-tax income in retirement contributions. Which job has a larger gross annual income?

A. Same gross annual income

B. Contract job

C. Full-time position

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Answers (1)

Know the Answer?

Michelle Kim · Answer 1

Option B, contract job

Step-by-step explanation:

It is likely the number of hours in a work week is 40 hours.

With fifty weeks in year 2020 and 10 ten days of Bank Holidays, the gross annual income from the contract full time employment can be computed thus

gross annual income=$40*40 * (53-2) = $81,600

The pay is $40 per hour

In a week 40 hours are worked

There are fifty three weeks in the year minus 10 days of holiday which represents 2 working weeks for a Monday to Friday job

The gross annual income for full time permanent role is $78,000

As a result, the full time contract job pays more