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Income and Taxes
| Question | Answer |
|---|---|
| Biweekly | Pay by every 2 weeks or every week |
| Dependent | Determined by |
| Direct deposit | the electronic transfer of a payment directly from the account of the payer to the recipient's account. |
| Earned income | Wages, salaries, tips, and other taxable employee pay. |
| Employee | a person employed for wages or salary, especially at nonexecutive level |
| Employer | a person or organization that employs people |
| Exemptions | the process of freeing or state of being free from an obligation or liability imposed on others. |
| Federal income taxes | the money that individuals and businesses pay to the U.S. government each year, based on their earnings. |
| FICA | Federal Insurance Contributions Act, U.S. federal payroll tax |
| Fringe benefits | an extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc. |
| Gross income | the total of all income received from any source before taxes or deductions |
| Hourly wage | the amount of money an employee earns for each hour they work |
| Income tax | tax levied by a government directly on income, especially an annual tax on personal income. |
| Medicare taxes | a percentage of gross wages that all employees, employers and self-employed workers must pay to fund Medicare |
| Net income | amount of money an individual or business has left after all expenses, taxes, and deductions are subtracted from their gross income. |
| Overtime pay | premium pay given to employees for working hours beyond a standard workweek, which is at least 1.5 times their regular rate of pay |
| Profit sharing | a system where a company gives employees a portion of its profits, in addition to their regular pay, based on a predetermined formula |
| Salary | a fixed, regular amount of money paid to an employee for their work, typically on a weekly, bi-weekly, or monthly basis |
| Sales commissions | form of payment to a salesperson based on their sales performance, calculated as a percentage of the value of the goods or services they sell. |
| Social security tax | The Social Security tax is a mandatory U.S. federal payroll tax used to fund the Old-Age, Survivors, and Disability Insurance (OASDI) program, which provides retirement, disability, and survivorship benefits to eligible Americans. |
| Tax deduction | expense that can be subtracted from your total income to reduce the amount of income subject to taxation, ultimately lowering your tax bill. |
| Tips | money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed, in addition to the basic price of the service |
| W2 form | United States federal wage and tax statement that an employer must give to each employee and also send to the Social Security Administration (SSA) every year |
| W4 form | IRS document you complete for your employer to determine how much should be withheld from your paycheck for federal income taxes and sent to the IRS. |
| Withholding | income an employer takes out of an employee's paycheck and remits to the federal, state, and/or local government |
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