What is the net (take-home) pay for an individual with expenses shown who has a gross income of $64,000?
Tax Table
| Expenses | Amount Taxed |
| :------------------ | :----------- |
| FICA | $4,690.00 |
| State Income Tax | $1,860.00 |
| Federal Income Tax | $6,300.00 |
| Medical Insurance | $1,000.00 |
Answer (2)
Calculate the total expenses by summing all given expenses: $4 , 690.00 + $1 , 860.00 + $6 , 300.00 + $1 , 000.00 = $13 , 850.00 .
Subtract the total expenses from the gross income: $64 , 000 − $13 , 850.00 = $50 , 150.00 .
The net (take-home) pay is $50 , 150 .
Explanation
Understanding the Problem We are given the gross income and several expenses, and we need to calculate the net (take-home) pay. The net pay is the gross income minus all the expenses.
Calculating Total Expenses First, we need to calculate the total expenses. The expenses are FICA tax, State Income Tax, Federal Income Tax, and Medical Insurance. We add these up:
Total Expenses = FICA + State Income Tax + Federal Income Tax + Medical Insurance Total Expenses = $4 , 690.00 + $1 , 860.00 + $6 , 300.00 + $1 , 000.00 = $13 , 850.00
Calculating Net Pay Now, we subtract the total expenses from the gross income to find the net pay:
Net Pay = Gross Income - Total Expenses Net Pay = $64 , 000 − $13 , 850 = $50 , 150
Final Answer Therefore, the net (take-home) pay is $50 , 150 .
Examples
Understanding net pay is crucial for budgeting and financial planning. For example, if you're planning to buy a car or a house, knowing your exact take-home pay helps you determine how much you can realistically afford for monthly payments. It also helps in understanding how much of your income goes towards taxes and other deductions, which is essential for long-term financial goals and investments.
The net (take-home) pay for an individual with a gross income of $64,000 and the specified expenses is $50,150. This is calculated by subtracting the total expenses of $13,850 from the gross income. Therefore, the calculated net pay indicates what the individual retains after taxes and other expenses.
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