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Accounting Chap 12

Vocab

TermDefinition
401 (k) A qualified retirement plan sponsored by an employer.
commission A method of paying an employee based on the amount of sales the employee generates.
direct deposit The payment of an employee's net pay using electronic funds transfer.
electronic funds transfer A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.
Medicare tax A federal tax paid for hospital insurance.
net pay The total earnings paid to an employee after payroll taxes and other deductions.
social security tax A federal tax paid for old-age, survivors, and disability insurance.
tax base The maximum amount of gross earnings on which a tax is calculated.
withholding allowance A deduction from total earnings for each person legally supported by a taxpayer, including the employee.
Roth individual retirement account A qualified retirement plan that allows tax-free withdrawals from the account.
Created by: Knuddar