Gross Pay Flashcard

Front

What is Gross Pay?

Back

Gross Pay is the total amount of money earned by an employee before any deductions such as taxes, social security, and health insurance.

Front

How do you calculate commission earnings?

Back

Commission earnings can be calculated by multiplying the total sales by the commission rate. For example, if the sales are $10,300 and the commission rate is 7.25%, the commission is $10,300 * 0.0725 = $746.75.

Front

What is the significance of state income tax rate in gross pay?

Back

The state income tax rate determines how much money is deducted from an employee's gross pay for state taxes. A rate of 0% means no state income tax is deducted.

Front

How do you calculate an employee's gross pay based on hourly wage?

Back

Gross pay can be calculated by multiplying the number of hours worked by the hourly wage. For example, if Joe worked 35 hours at $17.25 per hour, his gross pay is 35 * 17.25 = $603.75.

Front

What are deductions in the context of gross pay?

Back

Deductions are amounts subtracted from gross pay, including taxes, social security, and health insurance, which result in net pay.

Front

How do you calculate net pay?

Back

Net pay is calculated by subtracting total deductions from gross pay. For example, if Mark's gross pay is $3,800 and total deductions are $850.70, his net pay is $3,800 - $850.70 = $2,929.30.

Front

What is Social Security deduction?

Back

Social Security deduction is a percentage of an employee's earnings that is withheld to fund the Social Security program, which provides benefits for retirees and disabled individuals.

Front

If an employee earns $1,970 in a month, how do you calculate the Social Security deduction?

Back

To calculate the Social Security deduction, multiply the monthly earnings by the Social Security tax rate (currently 6.2% for employees). For $1,970, the deduction would be $1,970 * 0.062 = $122.14.

Front

What is the formula for calculating commission?

Back

Commission = Total Sales x Commission Rate.

Front

What is the difference between gross pay and net pay?

Back

Gross pay is the total earnings before deductions, while net pay is the amount received after all deductions are made.