UNIT 2 TEST – Earning and Reporting Income

To determine your gross pay when you receive an hourly wage, you multiply your hourly rate by the number of regular hours worked.

• True

• False

Overtime wages are usually calculated at twice the regular hourly rate.

• True

• False

A standard workweek is 40 hours in a five-day period.

• True

• False

Social security tax is an example of an optional deduction from your paycheck.

• True

• False

The more allowances claimed on your Form W-4, the less tax withheld from your gross pay.

• True

• False

A 1099 form reports other income such as interest and

     dividends.

• True

• False

A 401K is a retirement plan for a person working in the public sector.

• True

• False

If you are considered a salary employee you could also earn overtime pay.

• True

• False

You must pay taxes on various types of income including dividend income, alimony, rental income and unemployment compensation.

• True

• False

How are labor unions funded?

• government subsidy

• private donations

• dues from members

• profits from services sold