Payroll Deductions Quiz

Which tax provides for medical benefits?

• FICA

• Federal income tax

• Social Security tax

• Medicare tax

The Medicare tax rate is 1.45% of gross pay.

• True

• False

How much income tax do employers withhold from employee pay?

• Employers use the information on Form W-4 to compute income tax withholding.

• 1.45% of gross pay

• 6.2% of gross pay

• 7.65% of gross pay

Net pay

• is also known as take-home pay.

• is more than gross pay.

• depends on how much the employee wants to pay in Social Security taxes

• is gross pay minus 7.65%.

Payroll and income taxes are withheld from employees’ pay by their _______________.

You are filling our your W2 form. As the number of allowances increases, the amount of federal income tax withheldA. increases.B. decreases.C. is not affected.

• increases

• decreases

• is not affected

This tax helps pay for services provided by the federal government, such as defense, human services, and the monitoring and regulation of trade.

• Federal Income Tax

• State Income Tax

• Local Income Tax

This tax helps pay for services provided by the city, or local government, such as schools, police, and fire protection.

• Federal Income Tax

• State Income Tax

• Local Income Tax

This deduction will pay a beneficiary in the event that an employee dies.

• Life Insurance

• Long-term disability

• Medical Insurance

The Social Security tax rate is

• 1.45%

• 6.20%

• 7.65%