Sean 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.

If we calculate the net take home pay and we assume the employer withheld federal income tax (wage-bracket, married, 2 allowances), social security taxes, and state income tax (2%)

Married at least $500 but not more than $510       $21
Social Security at 4.2%                                          $21
State income tax at 2%                                          $10
Total taxes:                                                             $52

Total net take-home pay:                                       $598