Documentation and Deductions
What two forms does every person complete when they begin a new job?
Form W-4 and Form I-9
What is a pay period? ▪
A length of time for which an employee’s wages are calculated. May be weekly, bi‐weekly, or monthly
What is Withholding Tax?
▪ The amount of tax required by law to be withheld from wages earned
Which is the higher amount – gross income or net income?
▪ Gross income
What are deductions?
The amount that is subtracted from gross pay
What two deductions are withheld under the FICA heading?
▪ Social Security and Medicare
What is the pay a person actually takes home: gross or net?
Net income
Define payroll withholdings. ▪ Money is subtracted or deducted from gross income earned.
▪ Money is subtracted or deducted from gross income earned.
Define net income.
▪ The amount paid after all the deductions are subtracted from the gross income amount
When a person is paid using Direct Deposit, what does this mean?
Wages go directly from an employer bank account to an employee’s bank account
Why would a person complete a Form I‐9?
To determine if they are eligible to be hired in the United States.
Name three ways an employee may be paid.
▪ A paycheck, direct deposit of paycheck, payroll card
What are three things tax dollars pay for?
▪ Roads
▪ Police
▪ Fire/Emergency services
▪ Government agencies
▪ Schools
What is Medicare? ▪ Medicare is hospital and medical insurance for the elderly and disabled
▪ Medicare is hospital and medical insurance for the elderly and disabled
What is a payroll card?
A card issued to the employee from the employer and it electronically carries the balance of the employee’s net income
Give two examples of documentation and identification required to complete the Form I‐9.
Birth certificate, driver’s license, passport, and Social Security card.
What is the least secure way to pay employees?
▪ Paycheck and pay‐stub
How is the Form W-2 used?
It tells how much money was earned and paid in taxes during the previous year. It is used to file income taxes.
Define gross income. ▪ The total amount of money earned in a pay period.
▪ The total amount of money earned in a pay period.
What does Y-T-D stand for, and what is it?
Year to Date; Accumulated deductions for the year
What is a paycheck stub?
A paycheck stub is the second part of a paycheck with the written record of the withheld deductions.
Define payroll withholdings.
▪ Money is subtracted or deducted from gross income earned.
What determines the amount of taxes withheld from an employee’s paycheck?
▪ The information supplied by the employee on the Form W‐4 and the amount of earnings.
How is gross income calculated if earning an hourly wage? ▪ By multiplying the number of hours worked in a pay period by the hourly wage.
▪ By multiplying the number of hours worked in a pay period by the hourly wage.
Approximately how much money goes to taxes from a paycheck?
Approximately 30% of every paycheck goes to taxes