You are working for Gillian Co., and you are paid once a month. Your gross monthly pay is $3,400. Gillian Co. is subject to the following taxes:

Tax Rate Applied to

FICA Social Security 6.20% First $118,500 per year

FICA Medicare 1.45% All gross pay

FUTA 0.80% First $8,000 per year

SUTA 2.90% First $8,000 per year

You also have Federal Income Tax withheld from your check each month. You have worked for Gillian Co. for five years and have not received a raise. You plan to address this in the morning with your boss, John Gillian, majority owner of Gillian Co. and CEO. In preparation for your meeting, you decided to calculate exactly what your net increase will be if you get the raise as well as to determine how much the raise will cost Gillian Co. when all taxes are taken into consideration. You are planning to ask for a raise to $5,000 per month. However, you are going to calculate the cost based on two scenarios: a new salary of $4,000 per month and $5,000 per month. You will assume that 25% of your check will be withheld for Federal Income Tax. You are assuming that your increase will take effect March 1. Your gross pay through the end of February will be $6,800. (show all your computations)

1. Incremenal cost to Gillian in March for a raise to $4,000:

Extra salary ___________________

Extra FICA Social Sec. ___________________

Extra FICA Medicare ___________________

Extra FUTA ___________________

Extra SUTA ___________________

2. Incremental cost to Gillian in March for raise to $5,000:

Extra salary ____________________

Extra FICA Social Sec. ____________________

Extra FICA Medicare ____________________

Extra FUTA ____________________

Extra SUTA ____________________

3. Net amount you bring home now out of a $3,400 monthly salary: __________________________

3. Net amount you will bring home out of a $4,000 monthly salary: ___________________________

3. Net amount you will bring home out of a $5,000 monthly salary: ___________________________