An employee's gross pay is $3,000. Calculate the net pay after deducting federal withholding ($450), state withholding ($120), FICA taxes ($229.50), and health insurance ($150).
Correct Answer
D) $2,050.50
Net pay = Gross pay - All deductions. $3,000 - ($450 + $120 + $229.50 + $150) = $3,000 - $949.50 = $2,050.50.
Why This Is the Correct Answer
Net pay is calculated by subtracting all deductions from gross pay. The total deductions are $450 + $120 + $229.50 + $150 = $949.50. Subtracting this from the gross pay of $3,000 gives us $3,000 - $949.50 = $2,050.50. This represents the actual amount the employee will receive after all required withholdings and voluntary deductions.
Why the Other Options Are Wrong
Option A: $2,070
This answer of $2,070 suggests total deductions of $930, which is $19.50 less than the actual total deductions of $949.50.
Option B: $2,380
This answer of $2,380 indicates total deductions of only $620, which significantly underestimates the actual deduction amounts provided in the problem.
Option C: $2,200.50
This answer of $2,200.50 suggests total deductions of only $799.50, which fails to account for all the specified deductions properly.
Memory Technique
Remember 'FISH' for common payroll deductions: Federal taxes, Insurance, State taxes, FICA (Health insurance fits under Insurance). Always add all deductions first, then subtract from gross.
Reference Hint
Look up payroll calculations and employee compensation sections in your Florida construction business practices or accounting reference materials.
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