Understanding Paychecks and Deductions

What is gross pay?

• The amount received as a bonus

• The amount listed on a job posting

• The amount earned after taxes and deductions

• The amount earned before taxes and deductions

What is deducted from gross pay for health insurance?

• Nothing, it's covered by the employer

• The entire premium

• A fixed amount regardless of the premium

• A portion of the premium

What are FICA taxes used for?

• State income tax

• Health insurance

• Federal income tax

• Medicare and Social Security

What percentage of income is typically paid to FICA?

• 7.65%

• 10%

• 5%

• 15%

Which type of income is NOT subject to FICA taxes?

• Overtime pay

• Working income

• Bonuses

• Passive income from investments

What determines the specific amount deducted for federal income tax?

• Your working hours

• Your age

• Your income

• Your job title

What is one type of taxes paid in big cities like New York?

• There is no local income tax

• Employers do not pay any tax

• Residents pay a local income tax

• Non-residents pay a local income tax

What happens if you work in one state and live in another, and both states charge income tax?

• You pay income tax to the state where you work

• You pay income tax to both states

• You pay income tax to the state where you live

• You don't pay any income tax

What are payroll taxes?

• Taxes charged on all working income

• Taxes charged on passive income

• Taxes charged only on bonuses

• Taxes charged only on overtime pay

What is the purpose of deductions on a paycheck?

• To cover various benefits and taxes

• To provide bonuses

• To increase the gross pay

• To reduce the working hours