Understanding Your Paycheck

What is net pay?

• The amount of pay earned for the total number of hours worked.

• The amount of money you're paid after all taxes and deductions are taken out of your paycheck.

• The amount of money you're paid before all taxes and deductions are taken out of your paycheck.

• Your gross pay plus any bonuses.

Which of the following is a possible tax or deduction that they may show up on your paycheck?

• Federal income tax

• Contributions to retirement savings

• FICA

• All of the above

When you start a new job, you fill out a W-4 form to _________.

• determine how much your gross pay should be.

• file your tax return.

• avoid paying income taxes on your paychecks.

• to determine how much federal income tax your employer should withhold from your paychecks.

What is the purpose of a paycheck stub?

• To show the breakdown of earnings and deductions

• To provide a summary of annual earnings

• To calculate annual taxes

• To apply for a loan

Which of the following is typically not found on a paycheck?

• Gross pay

• Net pay

• Social Security number

• Employee ID

What does FICA stand for on a paycheck?

• Federal Insurance Contributions Act

• Federal Income and Contributions Act

• Federal Investment and Contributions Act

• Federal Insurance and Compensation Act

Which of the following is a mandatory deduction from most paychecks?

• Health insurance premium

• Union dues

• Federal income tax

• Charitable donations

What is gross pay?

• The total amount earned before deductions

• The amount after taxes are deducted

• The amount after retirement contributions

• The amount after health insurance deductions

Why might an employee's net pay be lower than expected?

• Increased gross pay

• Additional voluntary deductions

• Fewer working hours

• Higher gross pay

What is the main difference between gross pay and net pay?

• Gross pay includes deductions, net pay does not

• Net pay includes deductions, gross pay does not

• Gross pay is after taxes, net pay is before taxes

• Net pay is before taxes, gross pay is after taxes