Gross Pay question

Question

A sales clerk's take-home pay is found by subtracting all taxes and retirement contributions from gross pay (which consists of salary plus commission). Given the following information, complete parts (a)–(c).
Salary = $300.00 Commission = $688.91
Retirement = 5% of gross pay
Taxes: State = 5% of gross pay,
Local = 1% of gross pay
Federal withholding = 25% of (gross pay less retirement)
Federal social security and Medicare = 7.65% of gross pay
(a) Find the gross pay.
$


(b) Find the amount of federal withholding. (Round your answer to the nearest cent.)
$


(c) Find the take-home pay. (Round your answer to the nearest cent.)

Answer 1

Gross pay is salary plus commission, therefore it is

 

Gross pay: $300 + $688.91 = $988.91

 

Gross pay less retirement: $988.91* .95 = $939.47

 

Retirement: $49.45

State Tax: 988.91 * 5% = $49.45

Local tax: $988.91 * 1% = $9.89

Tax withheld: $939.47 * .25 = $234.87

SS and Medicare: $988.91 * .0765 = $75.65

 

Take-home pay $988.91 - $419.31 = $569.60