Understanding Your Paycheck

What is the difference between gross pay and net pay?

• Net pay includes bonuses, gross pay does not.

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

• Gross pay is the total earned, net pay is what you take home.

• Gross pay is after deductions, net pay is before.

Which of the following is a statutory withholding?

• Health insurance

• Charitable donations

• Federal income tax

• Retirement savings

How can optional deductions benefit you?

• They increase your gross pay.

• They are refunded at the end of the year.

• They reduce your taxable income.

• They eliminate the need to pay taxes.

What do taxes fund according to the video?

• Private businesses

• Only federal government operations

• Personal savings accounts

• Roads, schools, and public services

What should you do if you earn income from freelance work?

• Rely on the employer to withhold taxes

• Check state rules and pay taxes yourself

• Only pay taxes if you earn over $10,000

• Ignore tax obligations