Taxation and Income Quiz

What is the primary source of income for an employee?

• Business profits

• Rental income

• Compensation for services

• Investment income

Which of the following is NOT a component of gross compensation income?

• Hazard pay

• Profit-sharing

• Rent income

• Retirement pay

A payment given to a person as recognition for services performed, without a fixed fee, is known as:

• Commission

• Honorarium

• Salary

• Wage

Allowances that are directly related to the employee's job duties and are subject to accountability are generally:

• Taxable

• Non-taxable

• Partially taxable

• Depends on the employer's policy

Retirement pay is generally taxable unless:

• It's received from a government-approved pension plan

• The employee is under 50 years old

• The employee has served for less than 10 years

• The employee voluntarily retired

Separation pay is generally taxable if:

• It's due to involuntary separation

• It's received by the employee's heirs

• It's voluntarily availed

• It's due to a company merger

The 13th-month pay is generally:

• Fully taxable

• Fully non-taxable

• Partially taxable up to a certain amount

• Taxable only if received in cash

Overtime pay is:

• Not included in gross compensation

• Included in gross compensation

• Taxable only if received in excess of regular salary

• Taxable only if received for work on weekends

Fringe benefits paid in kind to rank-and-file employees are generally:

• Taxable as part of gross compensation

• Non-taxable

• Taxable only if the value exceeds a certain threshold

• Taxable only if received by executives

Which of the following is NOT a type of allowance that may be included in gross compensation income?

• Transportation allowance

• Representation allowance

• Cost of living allowance

• Rental allowance