done, produced, or occurring every two weeks or twice a week

Electronic transfer of paycheck into an employee’s bank account; considered convenient and secure

is money received from work or services performed, including wages, salaries, tips, and commissions.

a person who works for an employer and is paid wages or salary under a contract of employment.

a business or individual that hires employees and provides compensation and benefits.

reduce the amount of income subject to taxation, typically claimed for oneself, a spouse, and dependents.

Progressive tax on earnings determined using IRS tax brackets and filing status

FICA (abbreviation and definition)

Payroll tax funding Social Security and Medicare. Employees pay 6.2% for Social Security and 1.45% for Medicare; employers match these amounts

are non-wage compensations provided to employees, such as health insurance, retirement plans, and paid time off.

Total earnings before any taxes or deductions, including wages, salary, commissions, and bonuses

Compensation based on the number of hours worked, calculated by multiplying hours by the pay rate

Mandatory deductions for federal, state, and sometimes local governments based on taxable income

Portion of FICA funding health insurance for seniors, with no wage limit; high earners may pay an additional 0.9%

Income remaining after taxes and other deductions; the amount actually received by the employee

Extra pay for hours worked beyond the standard 40 per week, usually 1.5× regular rate

is a plan where employees receive a share of the company's profits, often as an additional incentive or retirement contribution.

Fixed annual compensation, divided among pay periods like monthly or biweekly

are earnings based on a percentage of sales made by an employee.

Portion of FICA funding retirement, disability, and survivor benefits, up to an annual wage limit

reduces taxable income, lowering the amount of tax owed.

Gratuities received from customers, often added to gross income

reports an employee’s annual wages and the taxes withheld for federal and state purposes.

is filled out by employees to inform employers of withholding allowances and determine the amount of federal income tax to withhold.

is the portion of an employee’s paycheck that an employer deducts to pay federal, state, and local taxes on the employee’s behalf.

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Income and Taxes

Term	Definition
BiWeekly	done, produced, or occurring every two weeks or twice a week
Direct Deposit	Electronic transfer of paycheck into an employee’s bank account; considered convenient and secure
Earned Income	is money received from work or services performed, including wages, salaries, tips, and commissions.
Employee	a person who works for an employer and is paid wages or salary under a contract of employment.
Employer	a business or individual that hires employees and provides compensation and benefits.
Exemptions	reduce the amount of income subject to taxation, typically claimed for oneself, a spouse, and dependents.
Federal Income Tax	Progressive tax on earnings determined using IRS tax brackets and filing status
FICA (abbreviation and definition)	Payroll tax funding Social Security and Medicare. Employees pay 6.2% for Social Security and 1.45% for Medicare; employers match these amounts
Fringe Benefits	are non-wage compensations provided to employees, such as health insurance, retirement plans, and paid time off.
Gross Income	Total earnings before any taxes or deductions, including wages, salary, commissions, and bonuses
Hourly Wage	Compensation based on the number of hours worked, calculated by multiplying hours by the pay rate
Income Tax	Mandatory deductions for federal, state, and sometimes local governments based on taxable income
Medicare Tax	Portion of FICA funding health insurance for seniors, with no wage limit; high earners may pay an additional 0.9%
Net Income	Income remaining after taxes and other deductions; the amount actually received by the employee
Overtime Pay	Extra pay for hours worked beyond the standard 40 per week, usually 1.5× regular rate
Profit Sharing	is a plan where employees receive a share of the company's profits, often as an additional incentive or retirement contribution.
Salary	Fixed annual compensation, divided among pay periods like monthly or biweekly
Sales Commissions	are earnings based on a percentage of sales made by an employee.
Social Security Tax	Portion of FICA funding retirement, disability, and survivor benefits, up to an annual wage limit
Tax Deduction	reduces taxable income, lowering the amount of tax owed.
Tips	Gratuities received from customers, often added to gross income
W2 Form	reports an employee’s annual wages and the taxes withheld for federal and state purposes.
W4 Form	is filled out by employees to inform employers of withholding allowances and determine the amount of federal income tax to withhold.
Withholding	is the portion of an employee’s paycheck that an employer deducts to pay federal, state, and local taxes on the employee’s behalf.

Created by: etampubolon260

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