AMDM Finance and Salary

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What is take home pay?

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Take home pay is the amount of money an employee receives after all deductions, such as taxes and retirement contributions, have been subtracted from their gross pay.

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What is a paycheck stub?

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A paycheck stub is a document provided with each salary payment that details the earnings, deductions, and net pay for the pay period.

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What are state taxes?

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State taxes are taxes imposed by individual states on income earned by residents and businesses within that state.

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What is FICA?

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FICA stands for the Federal Insurance Contributions Act, which mandates a payroll tax to fund Social Security and Medicare.

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How is Medicare tax calculated?

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Medicare tax is calculated as a percentage of an employee's gross pay, currently set at 1.45%.

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What is the purpose of Social Security tax?

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Social Security tax funds the Social Security program, which provides benefits to retirees, disabled individuals, and survivors of deceased workers.

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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 have been made from their gross pay.

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How do you read a pay stub?

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To read a pay stub, identify the gross pay, deductions (like taxes and benefits), and the net pay to understand your earnings and withholdings.

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What is the difference between wages and salary?

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Wages are typically paid hourly and can vary based on hours worked, while salary is a fixed amount paid regularly regardless of hours worked.