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epf 4
| Term | Definition |
|---|---|
| Salaried | an employee is paid a set amount for a specific period of time (weekly/monthly/annually, etc) regardless of the number of hours they work; this type of position may be referred to as “exempt” because it does not regularly pay overtime |
| Hourly | employee is paid a set rate according to the number of hours they work; some employers will refer to this type of position as “nonexempt” because hourly employees qualify for overtime rate increases |
| Commission | a fee that a salesperson receives upon completion of a sale |
| Freelance | a self-employed individual not usually connected with an employer |
| Apprenticeship | a position in which someone learns an art, trade, or job from someone else |
| Wages | a fixed amount of money paid to an employee on a regular basis such as weekly, bi-weekly or monthly |
| Full/part-time work | this income can help to pay for expenses, part-time less than 40 hours per week, full time 40+ hours a week. |
| Student work study | a federal program that provides part time employment opportunities to students with financial need, allowing them to help pay educational expenses |
| Consolidating loans | combining a number of financial accounts or funds into a single overall account or set of accounts |
| Earned income | taxable wages from working for someone else |
| Passive income | regular earnings from a source other than an employer or contractor |
| Capital gains | the increase in a capital asset’s value and is realized when the asset is sold (sale price-initial cost) |
| Federal Insurance Contributions Act (FICA) | this includes Social Security and Medicare Taxes |
| Gross income | your pay before deductions |
| Net income | your take home pay after all deductions |
| Adjusted gross income | gross income after calculating certain reductions known as adjustments |
| Self-employment | someone who earns their income through independent economic activity (as opposed to through an employer) |
| Side hustle | a secondary business or job that brings in additional income, supplementary income. |
| Investments | assets purchased with the goal of providing additional income from the asset itself but with the risk of loss |
| Equity | the value of an asset after liabilities are deducted from it (value-unpaid debt on purchase) |
| Dividend | the share of profits distributed in cash |
| Rentals | an example of an entitlement |
| “Gig” economy | flexible, temporary, or freelance jobs; now this is often done through online platforms |
| W-4 Form | federal tax form you complete at the start of employment that claims your allowances for payroll taxes |
| W-2 Form | tax form supplied by your employer, which is required to file your taxes each year. |
| Federal income tax | assessed using a graduated system; taxpayers fall in brackets based on their adjusted income and pay at the rate of their bracket; higher brackets pay higher rates of income tax |
| State income tax | North Carolina assesses a flat rate income tax |
| Flexible Savings Account for Healthcare | an elected pre-tax deduction for eligible healthcare expenses; if you don’t use it, you lose it at the end of the calendar year; shields income from taxes |
| Flexible Savings Account for Childcare | an elected pre-tax deduction taken from your paycheck; cannot be combined with childcare credits on taxes which usually benefit most families more than this program |
| Pre-tax deductions | lower an individual’s taxable income |
| Post-tax deductions | these are deducted from an individual’s net income; they do not lower an individual’s tax responsibility directly |
| Union dues | dues are usually taken out either as a straight fee or percentage of your income for union members that is paid to the union |
| Deductions vs. exemptions | deductions are items you can claim to reduce tax liability but exemptions are people you claim to reduce tax liability |
Created by:
deissyg
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