$2 (Payroll / Employee Benefits). (1) Charlie works for PWC, and his annual salary is $80,000. (2) PWC withholds $7,763 of Charlie's salary for federal income taxes. (3) PWC provides all employees with (a) medical insurance (Charlie's insurance cost $5,000). PWC also offers a (b) group-term life insurance where the coverage amount for Charlie is $800,000. The monthly cost per $1,000 coverage is $0.15. Assume 12-month coverage. (4) Charlie lets KPMG withhold $5,000 under the company's flexible benefits plan; $2,750 for medical and dental expenses and $2,250 for child-care expenses. (5) PWC has a qualified pension that covers all employees. Under the plan, PWC matches contributions to the plan up to 5% of the employee's annual salary. Charlie makes the maximum allowable contribution, i.e., 10% of his annual salary