Accounting for Employee Payroll Deducations - Accounting

The video tutorial explains employee payroll deductions, focusing on federal and state income taxes, Social Security, Medicare, and voluntary withholdings. It details how these deductions are calculated and their impact on take-home pay. The tutorial also highlights the hierarchy of deductions, starting with taxes and followed by voluntary contributions.

What is the first deduction taken from an employee's paycheck?

• Voluntary withholdings

• Social Security tax

• Federal and state income taxes

• State income tax

What determines the amount withheld for federal and state income taxes?

• Employee's choice of voluntary withholdings

• Fixed percentage of total earnings

• Employer's discretion

• Employee's annual earnings rate and W-4 allowances

Which of the following is true about Social Security tax in 2021?

• It is 6.2% of the first $142,800 earned.

• It is 1.45% of all earnings with no cap.

• It is 1.45% of the first $142,800 earned.

• It is 6.2% of all earnings with no cap.

What percentage is the Medicare tax for earnings over $200,000?

• 2.3%

• 6.2%

• 3.8%

• 1.45%

Which of the following is an example of a voluntary withholding?

• Medicare tax

• Federal income tax

• 401(k) contributions

• Social Security tax