Assuming a FICA Tax Rate of 7

question 30

Multiple Choice

Assuming a FICA tax rate of 7.65% on the first $117,000 in wages and 1.45% in excess of $117,000 and a federal income tax rate of 20% on all wages, what would be an employee's net pay for the year if he earned $180,000? Round all calculations to the nearest dollar.

• A) $134,867
• B) $133,953
• C) $144,000
• D) $134,136

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Definitions:

Demand

The consumer's desire and willingness to pay for a product or service at a specific price.

Supply

The total amount of a good or service that is available for purchase at any given price point.

Equilibrium Price

The equilibrium price where the supply of goods meets the demand for those goods in the marketplace.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market price.