An employee earns $2,000 gross monthly. Deductions include health insurance $104.36, 9% federal tax, 3% state tax, and 2% local tax. What is the net pay?

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Study for the MTTC Business Management, Marketing, and Technology (098) Test. Use flashcards and multiple choice questions with detailed explanations for each question. Prepare effectively for your exam!

Multiple Choice

An employee earns $2,000 gross monthly. Deductions include health insurance $104.36, 9% federal tax, 3% state tax, and 2% local tax. What is the net pay?

Explanation:
Net pay is what remains after all deductions are taken from gross pay. Here, the gross monthly pay is $2,000. The deductions are health insurance $104.36, plus 9% federal tax, 3% state tax, and 2% local tax, all based on the gross amount. Calculate the percentages: 9% of 2,000 is 180; 3% of 2,000 is 60; 2% of 2,000 is 40. Add these: 180 + 60 + 40 = 280. Add the fixed health insurance: 280 + 104.36 = 384.36 total deductions. Subtract from gross pay: 2,000 − 384.36 = 1,615.64. Net pay = $1,615.64.

Net pay is what remains after all deductions are taken from gross pay. Here, the gross monthly pay is $2,000. The deductions are health insurance $104.36, plus 9% federal tax, 3% state tax, and 2% local tax, all based on the gross amount.

Calculate the percentages: 9% of 2,000 is 180; 3% of 2,000 is 60; 2% of 2,000 is 40. Add these: 180 + 60 + 40 = 280. Add the fixed health insurance: 280 + 104.36 = 384.36 total deductions. Subtract from gross pay: 2,000 − 384.36 = 1,615.64.

Net pay = $1,615.64.

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