Chapter 2

Something of value offered to employees in addition to wages.

• Fringe Benefit

• Salary

• Commission

• Overtime Pay

An increase in pay.

• A raise

• A decrease in pay

• A bonus

• A deduction

Used to calculate and claim withholding allowances.

• W-4 Form

• 1040 Form

• 1099 Form

• W-2 Form

Paid by the employee in connection with work.

• Job expenses

• Personal expenses

• Leisure expenses

• Travel expenses

Tax rate increases for higher income levels.

• Tax rate decreases for higher income levels.

• Tax rate remains the same for all income levels.

• Flat rate tax

• Progressive Tax

Anything that is subtracted from gross pay.

• Deductions

• Net pay

• Bonuses

• Overtime pay

Includes Social Security and Medicare tax.

• Federal Income Tax

• State Income Tax

• Property Tax

• FICA Tax

Gross pay plus employee benefits.

• Value of Job

• Net pay

• Base salary

• Overtime pay

Tax rate is the same for all income levels.

• Flat rate tax

• progressive tax

• FICA

• Varies with income level

Deduction from paycheck for federal income tax.

• Health insurance premium

• Retirement savings contribution

• Federal withholding

• State income tax