Georgia Assessments for the Certification of Educators GACE Practice Test

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An employee earns $2,000.00 per month in gross pay, but pays 9% in federal taxes, 3% for state taxes, and 2% for local taxes. After tax, the company withholds $104.36 for health insurance. What is the employee's net pay?

$1,615.64
$1,720.00
$1,820.00
$2,000.00

The correct answer is: $1,615.64

To find the employee's net pay, start by calculating the total amount withheld for taxes and health insurance from the gross pay of $2,000.00. First, calculate the total tax percentage: - Federal taxes: 9% - State taxes: 3% - Local taxes: 2% Adding these percentages together gives you a total tax rate of 14%. To find the total tax amount: Total taxes = Gross pay × Total tax rate Total taxes = $2,000.00 × 0.14 = $280.00 Next, subtract the total taxes from the gross pay: Gross pay after taxes = Gross pay - Total taxes Gross pay after taxes = $2,000.00 - $280.00 = $1,720.00 Now, account for the health insurance withholding, which is $104.36: Net pay = Gross pay after taxes - Health insurance withholding Net pay = $1,720.00 - $104.36 = $1,615.64 Thus, the employee's net pay is $1,615.64, which aligns with the correct answer.