Unit 3 Review: Pay and Payroll Taxes

Why are there differences between gross pay and net pay? Provide two reasons.

• Overtime and holiday pay

• Bonuses and incentives

• Salary and commission

• Taxes and deductions

Match the example with the type of pay.

• hourly and commission

• You are paid $54,680 for the year. Even if you work overtime, this number will not change.

• salary

• You are a cashier who makes $9.15 per hour. You worked 55 hours this week, which is more than your regular hours. You were paid for 55 hours of work. 

• hourly and overtime

• You are a car salesperson and make $8.79 per hour and receive $75 for each new car you sell.

Match the scenario with the correct amount of pays.

• 24 pays

• 
  

  You work as a server and make an hourly rate of $7.00 and tips. You are paid weekly.

• 52 pays

• 
  

  You work as a psychologist and make a salary of $49,389 per year. When you were hired, you were told you would be paid bi-weekly.

• 26 pays

• 
  

  You work as an electrician and make $21.50 per hour. You work 30 hours per week and get paid semi-monthly.

Identify which deductions are voluntary versus involuntary.

• Federal Tax

• Retirement

• State Tax

• FICA

• Life Insurance

You are a salesperson for appliances and make $12.50 per hour. You are paid on a biweekly basis. Your boss encourages a competition between employees by letting you know that you will receive $83 for each appliance you sell.

In the first week, you work 35 hours and sell 4 appliances. In the second week, you work 37 hours and sell 3 appliances. How much will your pay be at the end of the two weeks?

You work as a nurse. You are paid $11.58 per hour. You work 39 hours a week. You get paid weekly. Your taxes are federal (10%), FICA (7.65%), and state (3%). You also contribute $15 to retirement per pay period.

How much is your realized income?

Put the steps in order!

• $358.36 - $15

• $451.62 * (0.7935) - $15

• $451.62 * (1 - 0.10 - 0.0765 - 0.03) - $15

• $343.36

• $11.58 * 39 = $451.62

What is the positive difference between the amount earned and the amount paid?

• Deficit

• Profit

• Commission

• Deduction

You work as an contractor and make a salary of $48,230 per year. You are paid semi-monthly with the following taxes removed:

• federal (10%)

• FICA (7.65%)

• state (3.07%)

You also contribute $18 per pay to your retirement.

How much is your realized income per pay?

What is a formula in Excel that tells the program to calculate something automatically?

• An equation

• A function

• A variable

• A constant

Which IRS form must be completed by every employee so that employers can withhold the correct federal income tax from your pay?

• PA-40

• W-2

• Form 1040

• W-4