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Juanita receives her paycheck and knows that her gross pay and federal tax are correct. Using the fact that Social Security tax is 6. 2% of gross pay, Medicare tax is 1. 45% of gross pay and state tax is 19% of federal tax, determine if Juanita's net pay is correct. Earnings Deductions Week Ended Regular FED. SOC. MED STATE WITH. WITH. CARE. WITH. NET PAY 11/17 $1,020. 00 $107. 00 $63. 24 $14. 79 $20. 33 $814. 64 Choose the true statement below. A. The net pay is correct. B. The Social Security tax is not correct. C. The Medicare tax is not correct. D. The state tax is not correct.

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chilljain33

The correct statement is that the Net Pay of Juanita is correct. So, the correct option that matches the statement quoted above is A.

The computation of net pay is done by deduction of tax withholding from the gross pay available in the hands of the individual. Calculation is shown as below.

Computation of Net Pay

The given information regarding the pay and withholding are as,

  1. Gross pay is $1020.00
  2. Social Security Tax at 6.2 percent is $63.24.
  3. Medicare Tax at 1.45% is $14.79.
  4. Federal Tax is given as $107.00.
  5. State tax is given as $20.833.
  6. Net Pay is given as $814.64.

After putting such values in the formula for computation, we can find that,

[tex]\rm Net\ Pay= Gross\ Pay - Tax\ Withholding\\\\\rm Net\ Pay= 1020.00- (63.24+14.79+20.33+107)\\\\\rm Net\ Pay= 1020-205.36[/tex]

Further,

[tex]\rm Net\ Pay= \$814.64[/tex]

The net pay computed is equal to the net pay given in the information above.

Hence, the correct option is A that the net pay of Juanita is correct.

Learn more about net pay here:

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