Assume your gross pay per pay period is $6,400 and you are in the 33% tax bracket. Calculate your...

Question:

Assume your gross pay per pay period is $6,400 and you are in the 33% tax bracket. Calculate your net pay and spendable income if you save $640 per pay period after paying income tax on $6,400. (Do not round intermediate calculations.)

Net Pay:

It is the Net Payment one receives in hand after deducting taxes.

Answer and Explanation:

Net Pay: {(Gross Pay)-(Gross Pay x Tax Rate )}

: {($ 6400) - ( $ 6400 x 0.33)}

: {($ 6400) - ( $ 2112)}

: $ 4288

Spendable Income: ( Net Income - Savings )

: ( $ 4288 - $ 640 )

:$ 3648

Thus, the net pay is $ 4288 and the spendable income is $ 3648


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What Is Net Pay? - Definition & How to Calculate

from Human Resource Management: Help and Review

Chapter 7 / Lesson 10
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