Understanding Payslips and Deductions

What is the difference between Gross and Net pay?

• Gross pay is the amount you earn after deductions, while Net pay is before deductions.

• Gross pay is the amount you earn before deductions, while Net pay is after deductions.

• Gross pay includes only bonuses, while Net pay includes only salary.

• Gross pay is the amount you earn after taxes, while Net pay is before taxes.

What is Income Tax?

• Money deducted from your wages that goes directly to your savings account.

• Money deducted from your wages that goes directly to the government.

• Money added to your wages by the government.

• Money deducted from your wages that goes to your employer.

What is a tax code?

• A code that determines your eligibility for a loan.

• A personalised code which helps your employer work out how much tax you need to pay.

• A code that indicates your credit score.

• A code that shows your annual income.

What are National Insurance contributions used for by the Government?

• To fund private companies.

• To support the NHS, public pension schemes, and unemployment benefits.

• To build new roads and bridges.

• To provide bonuses to government employees.

What are pension contributions?

• Money paid by the government for your current expenses.

• Money paid either by yourself or employer which is saved for your retirement.

• Money deducted for health insurance.

• Money used to pay off your student loans.

Which of the following is an example of other deductions that might be taken from your wages?

• Holiday bonus.

• Student loan repayment.

• Grocery expenses.

• Travel allowance.

What percentage of income tax do most people pay depending on their earnings?

• 10%/30%

• 15%/35%

• 20%/40%

• 25%/45%

Which of the following is NOT a use of National Insurance contributions?

• NHS funding.

• Public pension schemes.

• Unemployment benefits.

• Personal savings accounts.

What is the purpose of a tax code?

• To determine your eligibility for a mortgage.

• To help your employer calculate how much tax you need to pay.

• To assess your health insurance needs.

• To evaluate your job performance.

Which of the following is a correct statement about Gross pay?

• It is the amount you receive after all deductions.

• It is the amount you earn before any deductions.

• It is the amount you receive after tax deductions only.

• It is the amount you earn after pension contributions.