Definition
earned income
is the income received from employment.
income paid as a percentage of sales made by a salesperson.
commission
Net pay
take-home pay, is gross pay (plus bonuses) minus payroll deductions.
a report containing information used to calculate taxes owed by the taxpayer.
tax return
Dividends
are a portion of a corporation’s earnings paid to its stockholders.
Wage
payment for work that is usually calculated on an hourly, daily, or piecework basis.
money paid for service beyond what is required.
tip
Form W-4
the Employee’s Withholding Certificate that helps an employer determine how much income tax to withhold from an employee’s paychecks as payroll deductions.
the government expects individuals and businesses to voluntarily report all income that is subject to the income tax.
voluntary compliance
capital gain
results when property, such as corporate stock, is sold for an amount greater than its cost.
overtime wage
the amount paid for working time in a week that is beyond the standard 40-hour workweek.
money added to an employee’s base pay.
bonus
FICA taxes
are taxes paid by the employee and employer used to finance the federal Social Security and Medicare programs.
a Wage and Tax Statement that shows an individual’s earnings and the amounts of taxes withheld from the earned income during the current year.
Form W-2
Taxable income
the amount on which taxes are calculated.
piecework
a wage based on a rate per unit of work completed.
a subtraction from gross pay.
payroll deduction
employee benefit
a form of noncash compensation received in addition to a wage or salary.
all the income an individual receives in a year including both earned and unearned income.
gross income
Adjusted gross income
is calculated by subtracting adjustments from total income.
salary
a fixed payment for work and is expressed as an annual figure. It is paid in periodic equal payments.
total income before payroll deductions.
gross pay
Work-life balance
the amount of time an individual spends at work compared to the amount of time spent in a personal life.
earnings from sources other than work. Monetary gifts, lottery winnings, or other contest winnings are examples.
unearned income
standard deduction
a dollar amount that non-itemizers may subtract from their income before income tax is applied.