Unit 3 Test Review Consumer Math

Front

What is discretionary income?

Back

Discretionary income is the amount of income left after all fixed expenses and taxes have been paid. It can be used for non-essential items.

Front

What are payroll deductions?

Back

Payroll deductions are amounts withheld from an employee's gross pay, which can include taxes, insurance, and retirement contributions.

Front

What is the FICA tax rate?

Back

The FICA tax rate is 7.65%, which includes Social Security and Medicare taxes.

Front

How do you calculate net pay?

Back

Net pay is calculated by subtracting all deductions (taxes, insurance, etc.) from gross pay.

Front

What are mandatory deductions?

Back

Mandatory deductions are required by law, such as federal income tax and FICA.

Front

What is a discretionary expense?

Back

A discretionary expense is a non-essential expense that can be adjusted or eliminated, such as entertainment or dining out.

Front

What is gross pay?

Back

Gross pay is the total amount earned by an employee before any deductions are made.

Front

What is net income?

Back

Net income is the amount of money an employee takes home after all deductions have been made from gross pay.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant each month (e.g., rent), while variable expenses can fluctuate (e.g., groceries).

Front

What is the purpose of FICA deductions?

Back

FICA deductions fund Social Security and Medicare programs.