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An employee has gross pay of $4,000, federal income tax of $620, Social Security tax of $248, Medicare tax of $58, and state income tax of $215.19 withheld. What is the employee's net pay?
A$3,132.00
B$2,858.81
C$3,380.00
D$1,141.19
Answer & Solution
Correct answer: B. $2,858.81
1. Net pay = Gross pay minus all taxes withheld.
2. Total withheld: \$620 + \$248 + \$58 + \$215.19 = \$1{,}141.19.
3. Net pay: \$4{,}000 - \$1{,}141.19 = \$2{,}858.81.
4. Option D is the total deductions, not net pay; eliminate it.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §5.2 "Payroll", p.212_
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