EVERFI: Beginning Employment

What is withholding tax?

• Money an employer deducts from an employee's wages to pay to the government.

• Money that is used to pay an employee's health insurance benefits.

• Money that is used to contribute to an employee's retirement 401(k) plan.

• Money that an employee receives after deductions are taken out of a a paycheck.

Amla works as an administrative assistant. Her earnings before taxes are $1,840 bi-weekly. What number does $1,840 represent?

• Her net pay earnings

• Her gross pay earnings

• The amount she pays for FICA tax

• Her standard deduction

What does it mean when the money in your 401(k) is vested?

• You can keep the money your employer contributed, even if you leave your job.

• You will not have investment gains in your employer-sponsored retirement plan.

• You will never have to pay taxes on your employer-sponsored retirement plan.

• You can withdraw your money at any time without a penalty fee from the IRS.

Which of these types of insurance is a benefit that employers may offer you when you start employment?

• Renter's insurance

• Auto insurance

• Homeowner's insurance

• Vision insurance

Josh just started a new job. He earned $1,900 for two week of work, but the amount on his paycheck was only for $1,100. What is the most likely reason for why this occurred?

• He did not account for withholding taxes or deductions.

• He chose not to fill out a W-4 form when he started his job.

• He declined to participate in the company's 401(k) plan.

• He declined health insurance coverage.

Why do you have to fill out a W-4 when you start a new job?

• To opt to employer-sponsored benefits like health insurance

• To document what money should be withheld from your paycheck

• To agree to a vesting schedule for your company's 401(k)

• To determine your gross pay on your pay stub