Understanding Paychecks & Taxes

What does 'gross pay' mean?

• Pay after taxes

• Total pay before deductions

• Money saved in a bank

• Pay from working overtime

What does 'net pay' mean?

• Total pay before taxes

• Money paid for insurance

• Take-home pay after deductions

• Only federal tax money

Which of the following is a payroll tax?

• FICA

• Grocery tax

• Property tax

• Sales tax

FICA stands for money that supports:

• Social Security & Medicare

• Federal highways

• State colleges

• Local schools

Why are taxes taken out of paychecks?

• To pay for public services

• To punish workers

• To give money back to employers

• To buy groceries for families

If you earn $500 gross pay and have $100 in deductions, what is your net pay?

• $500

• $100

• $600

• $400

Which tax is required by the federal government?

• Federal income tax

• Local library tax

• Gasoline tax

• State lottery tax

Deductions may include (choose all that apply):

• Health insurance

• FICA

• Groceries

• Retirement savings

A pay stub helps employees:

• Understand their deductions

• Buy new clothes

• Avoid paying taxes

• Ask for more hours

If your gross pay is $1,000 and deductions are $250, what is your net pay?

• $500

• $250

• $1000

• $750