earning income test Flashcards
(30 cards)
Employment
an agreement between an employer and an employee 
employer
Someone who hires a person in exchange for compensation, usually in the form of wages are
Employee
A person who agrees to provide certain services at a job for an employer 
salary
A fixed amount of money or compensation paid to an employee by an employer in return for performed work; salaries are commonly paid in stages at fixed intervals
Commission
See that a sales person receives upon completion of a sale; it is a motivational system of payment designed to encourage sales to to be made more
methods of payment
paper paycheck
direct deposit
payroll card
Paper paycheck
your employer pays you by authorizing a check written to you in the amount of money earned; you are than able to access your wages by cashing your paycheck, and/or depositing it in a depository institution account
Direct deposit
your wages are deposited directly into your depository institution account; this method is more secure than a paper paycheck because there’s no direct handling
payroll card
A reloadable debit card onto which a workers pay is loaded; this is a good option. If you don’t have, can’t get it, or don’t want a traditional deposit account; when you make a purchase funds are automatically deducted from the balance of your payroll card.
Gross income
The amount of money earned before payroll taxes
net income
The amount of money you are left with once all deductions have been taken from your gross income 
Income tax
taxi pay to federal, state, and local governments on the amount of money you earn 
tax liability
total tax bill
payroll tax
tax withheld for paid on your behalf, fire employer
Federal income tax
text, levied by the United States interval, revenue service (IRS) on the annual earnings of individuals, corporations, trust, and other legal entities
how is the amount withheld from federal income tax determined
It is based on the amount of money earned, and the information you provide on the form W-4 form
form W-4
determines the amount of pay withheld from your paycheck to pay for your federal income tax liability 
State income tax
An income tax, collected by most, but not all states
social Security
Employers are required by law to withhold a Social Security tax from your earned wages; Social Security as a federal government program that funds, retirement accounts, financially support, citizens, who have experienced profound disability, the premature death of a parent, or premature death of a spouse and a family with children
What percent of your earnings go to Social Security?
6.2%
medicare
Employers are required by law to withhold from your earned income, this payroll contribution to Medicare; Medicare is a federal program whose main purpose is to help pay for healthcare for those over 65
What percent of workers contribute to Medicare?
1.45%
employee benefits
Employers may offer you employee benefits in the form of products or services that add extra value for employees beyond earned wages; you may pay a portion of the cost of the benefit 
What is outlined on your paystub?
information regarding deductions
