Michael is considering two job offers. • The manager position pays a salary of $
ID: 3141561 • Letter: M
Question
Michael is considering two job offers.
• The manager position pays a salary of $59,000.00 per year and includes two weeks of paid vacation, five sick days per year, paid health insurance and a fully paid retirement plan.
• The technician position pays an hourly wage of $30.00 per hour and includes five vacation days per year, five sick days per year, health insurance costs $35.00 per month, and a retirement plan that costs 1% of after tax income.
The government takes out 6.2% for Social Security, 1.45% for Medicare, and 15% for income tax. Assume that Michael will take 10 vacation days and five sick days per year.
1- Calculate the gross annual income for the technician position.
2- Calculate the gross monthly income for the manager job.
3- Calculate the gross monthly income for the technician position.
4- Calculate the after-tax monthly income for the manager position.
5-Calculate the after tax monthly income for the technician position.
6-The manager position includes two weeks (10 days) of vacation. Calculate the monthly cost for vacation for the manager position. Explain how you calculated your answer.
7-Calculate the monthly cost of a retirement plan for the technician position.
8-Calculate the NET monthly income for the manager position. Recall that "net" means after all deductions are taken, including taxes, health insurance, vacation, sick leave and retirement.
9-Calculate the NET monthly income for the technician position. Recall that "net" means after all deductions are taken, including taxes, health insurance, vacation, sick leave and retirement.
Explanation / Answer
(According to Chegg policy only four subquestions will be answered. Please post the remaining in another question)
(Note: Working hours are not specified. The solution assumes the 'standard' nine working hours)
1. Wage of the techinician per hour = $30.00
=> Wage per day = $30.00 * 9 = $270.00
=> Wage per year = $270.00 * 365 = $98,550.00
Thus the gross annual income of the technician = $98,550.00
2. Annual salary of the manager = $59,000.00
Therefore the gross monthly income of the manager = $59,000.00 / 12 = $4,916.67
3. Annual gross income of the technician = $98,550.00
Therefore the gross monthly income of the technician = $98,550.00 / 12 = $8,212.50
4. Annual gross income of the manager = $59,000.00
Tax on social security = 6.2%
Tax on medicare = 1.45%
Income Tax = 15%
=> Total tax = 6.2% + 1.45% + 15% = 22.65%
Thus the taxable amount = 22.65 * $59,000 / 100 = $13,363.50
=> The after tax income = $59,000 - $13,363.50 = $45,636.50