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Social security tax that is 6.2% of her gross pay medicare tax that is 1.45% of her gross pay state tax that is 21% of her federal tax determine how marilyn’s net pay will be affected if she increases her federal withholding allowances from 3 to 4. a. her net pay will increase by $15.00. b. her net pay will decrease by $15.00. c. her net pay will increase by $18.15. d. her net pay will decrease by $18.15.

Respuesta :

Marilyn's net pay will increase by $18.15 as her Federal Withholding Allowance increases from 3 to 4.

What is Federal Withholding Allowance?

A Federal Withholding Allowance is an exemption that lowers the amount of income tax you must deduct from an employee's paycheck.

Given: The following are the deductible computation:

  • For federal withholding allowance = 3:
  1. Social Security Tax: 6.2% of $810 = [tex]\frac{6.2\times810}{100}[/tex] = $50.22
  2. Medicare tax : 1.45% of $810 = [tex]\frac{1.45\times810}{100}[/tex] = $11.745
  3. State tax: (21% of 3)% of $810= [tex]\frac{21\times3 }{100} \times\frac{810}{100}[/tex] = 0.63% of $810 = [tex]\frac{0.63\times810}{100}[/tex] = $5.103

Total = $67.068; deducted amount of his gross pay = $810 - $67.068 $742.932 (3 federal withholding).

  • For Federal Withholding Allowance = 4:
  1. State tax: (21% of 4)% of $810 = [tex](\frac{21\times4}{100}) \times\frac{810}{100}[/tex] = 0.84% of $810 = [tex]\frac{0.84\times810}{100}[/tex] =  $6.8704

Thus, as we can see from the calculations, the State taxes increased from $5.103 to $6.8704. Hence, the net pay increases by $18.15 as the federal allowance increases from 3 to 4.

To learn more about Federal Withholding Allowance, refer to the link: https://brainly.com/question/1212566

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