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An employee earned $4,600 in February working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 earned during each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The employee has $644 in federal income taxes withheld and has voluntary deductions for health insurance of $50 and contributes 10% of gross pay to a retirement plan each month. The employer pays the $200 remainder of the health insurance premium and an equal amount of contribution to the retirement fund. What is the amount of net pay for the employee for the month of February

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Answer:

Wages payable $3,094.10

Explanation:

the journal entry used to record the employee's salary is:

February 28, wages expense:

Dr Wages expense 4,600

    Cr Retirement plan contribution payable 460

    Cr Federal income taxes withheld payable 644

    Cr FICA (Social Security) taxes withheld payable 285.20

    Cr FICA (Medicare) taxes withheld payable 66.70

    Cr Health insurance payable 50

    Cr Wages payable 3,094.10

The net pay = gross pay ($4,600) - retirement plan ($460) - federal income taxes ($644) - FICA ($351.90) - health insurance ($50) = $3,094.10

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