Personal Financial Literacy: 8-1 Taxes and Your Paystub

Medicare and Social Security are mandatory spending categories funded by which type of taxes that are withheld from your paycheck?

• Local

• State

• Federal

• FICA

The federal income taxes that are withheld from your paycheck are used to pay for what?

• Mandatory spending

• Discretionary spending

• Unemployment insurance

• Medicare and Social Security

All of the following options are benefits we receive as a result of government spending EXCEPT…

• Health and retirement benefits for seniors

• Credit card debt forgiveness

• National parks maintenance

• Public school education

What is the difference between gross pay and net pay?

• Net pay is before taxes and deductions are subtracted; Gross pay is your take-home pay

• There is no difference between gross pay and net pay

• Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay

What are Pre-Tax Deductions and Contributions?

• Contributions taken out of your paycheck AFTER taxes are calculated on your income

• Contributions taken out of your paycheck BEFORE taxes are calculated on your income

What are two examples of Employer Contributions?

• Health insurance and 401(k)

• 401(k) and Roth IRA

• Federal and state taxes

• Traditional and Roth IRA

About how frequently does Hope receive a paycheck? 

• Daily

• Weekly

• Every Two Weeks

• Monthly

Assuming that Hope receives a paycheck at regular intervals similar to the stub shown, how many pay periods has Hope had year-to-date (YTD)?

• 2

• 3

• 8

• 9

Which statement below accurately describes Hope’s gross wages? 

• Gross wages are calculated by multiplying Hope’s hourly rate by the number of hours she worked

• Gross wages are Hope’s fixed salary, which she receives for every pay period

• Gross wages are calculated by subtracting all of Hope’s deductions from her gross income

• Gross wages are how much Hope has earned over the course of the entire year

What was the largest deduction for this pay period?

• FICA Medicare Tax

• FICA Social Security Tax

• Federal Tax

• NC State Tax