Justin Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March, he earned $300.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($500.00), and the employer withholds the appropriate taxes for the tips from this first pay in March. Calculate his net take-home pay assuming the employer withheld federal income tax (wage-bracket, married filing jointly), social security taxes, and state income tax (2%).

As we go to press, the federal income tax rates for 2021 are being determined by budget talks in Washington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used.

Click here to access the Wage-Bracket Method Tables.

Gross pay	$300
Federal income tax	-72 (INCORRECT)
Social Security taxes - OASDI	-49.60
Social Security - HI	-11.60
State income tax	-16
Net Pay:	$147.80 (INCORRECT)