Your employer will often offer you the option to join the company’s group insurance plan. It might pay part of the cost of your medical insurance for you, or you might be entirely responsible for the premiums. In either case, your share of the cost is deducted from your paycheck.
Example
Find the deduction per pay period.
Mario Lopez participates in his company’s group medical insurance plan. The annual cost of Lopez’s plan is $2,500 per year. If the company pays 65 percent of the annual cost, how much is deducted from his biweekly paycheck to cover his portion?
- Find the percent paid by Lopez.
100% – 65% = 35% - Find the annual amount paid by Lopez.
$2,500 x 35% = $2,500 x 0.035 = $875 - Find the deduction per pay period.
$875.00 ÷ 26 = $33.65 deduction per pay period
Practice
Find the deduction per pay period.
1. Annual cost of insurance: $4,200; employer pays 70 percent; pay period: semimonthly.
2. Annual cost of insurance: $3,975; employer pays 60 percent; pay period: weekly.
3. Annual cost of insurance: $2,850; employer pays 55 percent; 12 pay periods.
4. Carl Tinsley earns $1,970 per month. His family insurance plan costs $4,450 per year. His employer pays 66 percent of the cost. If this is his only deduction, how much is his monthly paycheck after the medical insurance deduction?
5. Jack Montgomery participates in his company’s medical insurance plan. The plan has an annual cost of $3,975. The company pays 70 percent. If Montgomery is paid biweekly, what is his insurance cost per paycheck?
6. Anna Page, a teacher, earns $1,320 semimonthly. If the school’s insurance plan costs a total of $2,868, and it pays 75 percent of the cost, how much is deducted from each of Page’s paychecks?
7. Standardized Test Practice: Melvin Myers, a traveling salesman, has company medical insurance as well as travel insurance. The company he works for pays 60 percent of the medical insurance and 90 percent of the travel insurance. If the medical insurance has an annual cost of $3,500 and the travel insurance costs $1,200 per year, what total amount is deducted from his weekly paycheck for insurance?
A. $29.23 B. $61.15 C. $36.15 D. $9.04
(source) – edited for correctness