Marquis has a gross pay of $816. By how much will his gross pay be reduced if Marquis has the following items withheld? federal tax of $92 Social Security tax that is 6. 2% of his gross pay Medicare tax that is 1. 45% of his gross pay state tax that is 22% of his federal tax a. $82. 66 b. $129. 13 c. $164. 01 d. $174. 66 Please select the best answer from the choices provided A B C D.

Respuesta :

Gross pay is the amount of income before taxes and deductions. The amount by which the gross pay is reduced is $174.66.

What is gross pay?

The gross pay is the amount of salary or wages that is before the taxes or other deductions. The expense of tax and deductions are subtracted from the gross pay to calculate the net pay.

The gross pay of Marquis in the given question is $816. His gross pay will be reduced by the taxes to calculate the net pay.

The amount of reduction will be the sum of all the taxes levied such as federal tax, social security tax, and so on.

Therefore the amount by which the gross pay will be reduced is:

[tex]\begin{aligned} \rm Federal\: tax &= \$92\\\\\rm Social\: security\: tax (\$816\times 6.2\%) &= \$50.592\\\\\rm Medicare\:tax (\$816\times 1.45\%) &= \$11.832\\\\\rm \end[/tex]

The state tax is calculated as a percentage of federal tax. The state tax is:

[tex]\rm State \:tax (\$92\times 22\%) &= \$20.24\\[/tex]

Therefore the total amount of reduction is:

[tex]\rm Total\:amount\:of\:reduction = \$92 + \$\$50.592 + \$11.832 +\$20.24\\\\\rm Total\:amount\:of\:reduction = \$174.664[/tex]

Hence, the correct option is d.

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