Gross Pay/Net Pay

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What is Gross Pay?

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Gross Pay is the total amount of money earned by an employee before any deductions are made.

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What is Net Pay?

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Net Pay is the amount of money an employee takes home after all deductions, such as taxes and insurance, have been subtracted from Gross Pay.

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What does FICA stand for?

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FICA stands for Federal Insurance Contributions Act, which includes Social Security and Medicare taxes.

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What is the purpose of Federal Income Tax?

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Federal Income Tax is a tax levied by the federal government on an individual's income to fund government services and programs.

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Do employees in Florida pay State Income Tax?

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No, employees in Florida do not pay State Income Tax.

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What is the Medicare tax rate?

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The Medicare tax rate is 1.45% of an employee's gross pay.

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What is Social Security tax?

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Social Security tax is a federal tax that funds the Social Security program, providing benefits for retirees, disabled individuals, and survivors.

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How do you calculate Net Pay?

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Net Pay is calculated by subtracting all deductions (like taxes and insurance) from Gross Pay.

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What is a common deduction from Gross Pay?

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Common deductions from Gross Pay include Federal Income Tax, State Income Tax, Social Security Tax, Medicare Tax, and Health Insurance premiums.

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If an employee's Gross Pay is $1,500 and their total deductions are $350, what is their Net Pay?

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Net Pay = Gross Pay - Total Deductions = $1,500 - $350 = $1,150.