Understanding Paychecks

What are voluntary deductions?

• Taxes withheld from your paycheck

• Amounts withheld for programs you choose to participate in

• Fees for late payments

• Penalties for not working overtime

The amount of money you take home is called your

• Net Pay

• Gross Pay

• Total Pay

• Available Pay

What is the term for the total amount of money earned before any deductions?

• Net Pay

• Gross Pay

• Take-home Pay

• Disposable Income

Which of the following is a mandatory deduction from a paycheck?

• Health insurance premium

• Retirement savings contribution

• Federal income tax

• Charitable donation

What does the acronym FICA stand for in relation to paycheck deductions?

• Federal Insurance Contributions Act

• Federal Income Collection Agency

• Federal Investment and Capital Act

• Federal Insurance and Compensation Act

Which part of a paycheck shows the amount of money earned before taxes and deductions?

• Net Pay

• Gross Pay

• Deductions

• Withholding

What is the purpose of a W-4 form?

• To report annual income to the IRS

• To determine tax withholding from your paycheck

• To apply for a job

• To claim unemployment benefits

Which of the following is considered a voluntary deduction?

• Social Security tax

• Medicare tax

• Health insurance premium

• State income tax

What is the difference between net pay and gross pay?

• Net pay is before deductions; gross pay is after deductions

• Gross pay is before deductions; net pay is after deductions

• Net pay includes bonuses; gross pay does not

• Gross pay includes overtime; net pay does not

What information is typically found on a pay stub?

• Employee's job title

• Employee's work schedule

• Deductions and net pay

• Company's annual revenue