Pay Check Vocabulary

Pay Check Vocabulary

Vocabulary

Salary

A salary is a form of fixed amount of payment from an employer to an employee, which may be specified in an employment contract.

Hourly Wage/Pay

Hourly wage is the compensation that is based on the number of hours worked multiplied by an hourly rate of pay.

Commission

Commission pay is any money paid to an employee for the sale of a product or a service on behalf of their employer. Commission payment can a set percentage of sales or a flat dollar amount based on sales volume. 

Gross Annual Income

Gross annual income is the amount of money a person earns in one year before taxes and includes income from all sources.

Gross Monthly Income

Gross monthly income is the amount of income you earn in one month, before taxes or deductions are taken out. Your gross monthly income is helpful to know when applying for a loan or credit card

Taxes

A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Federal Income Tax

The federal income tax is the tax levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. Federal income taxes are applied to all forms of earnings that make up a taxpayer's taxable income, such as employment earnings or capital gains.

For this class, we will assume the Federal Income tax is 15% of gross monthly income.

FICA Tax

FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck.

*6.2% of your gross wages goes to Social Security tax.

*1.45% of your gross wages goes to Medicare tax.

After-Tax Income

After-tax income is the net income after the deduction of all federal, state, and withholding taxes.

Benefits

Benefits are offered by employers to improve the company’s recruiting and retention efforts. These benefits include health insurance, life insurance, paid vacation, flexible work schedules and workplace perks like on-site snacks and meals.

Net Pay/Take Home Income/Net Income

Net pay is the pay received by an employee after the deduction of taxes and other obligations.

Multiple Choice

Taxes for Social Security and Medicare are a part of ____?

• FDIC

• SIPC

• IRS

• FICA

Multiple Choice

For which of the following would an employer withhold money from an employee's pay?

• Federal income tax

• Social Security tax

• Medicare Tax

• All of the above

Multiple Choice

What is the amount of the monthly income remaining after all deductions have been taken?

• gross annual income

• gross monthly income

• net annual income

• net monthly income

Multiple Choice

Total amount of earnings made over a month before any deductions are____________.

• gross annual income

• net monthly income

• gross monthly income

• net annual income

Multiple Choice

Taxes for the US government:

• state taxes

• federal taxes

• social security

• medicare

Multiple Choice

________ is the same as your take home pay.

• Gross income

• Net income

• FICA

• Deducations

Multiple Choice

The amount you earn before taxes is your ______.

• net income

• hourly rate

• take home pay

• gross income

Multiple Choice

Gross Pay is what you earn; Net Pay is what you take home.

• True

• False

Multiple Choice

The annual amount is divided into equal amounts to be paid each pay period.

• Salary

• Hourly

• Commission

Multiple Choice

What is hourly wage?

• The amount you earn in one day

• The amount you earn per hour

• The amount you earn per piece completed

Multiple Choice

Social security and medicare fall under ______.

• FICA

• State Tax

• Federal Income Tax

Multiple Choice

Which one of the following would be listed under other deductions/benefits?

• Federal Income Tax

• State Tax

• FICA

• Health Insurance

Multiple Choice

FICA stands for _________.

• Federal Deposit Insurance Act

• Federal Insurance Communications Act

• Federal Import Contribution Act

• Federal Insurance Contribution Act

Done!!!