Common Pay Stub Deductions & Withholdings: Practical Examples for Youth

📚 Quick Study Guide

• 💰 Gross Pay: Total earnings before any deductions.
• 🧾 Net Pay: The amount you actually take home after deductions.
• 🏢 Federal Income Tax: Money withheld for federal taxes. This is determined by your W-4 form.
• 🏘️ State Income Tax: Money withheld for state taxes (if applicable).
• 👴 Social Security Tax (FICA): Tax that goes towards Social Security benefits. The rate is 6.2% of your gross pay up to a certain limit.
• 🏥 Medicare Tax (FICA): Tax that goes towards Medicare benefits. The rate is 1.45% of your gross pay.
• 🚑 Health Insurance: Deduction for health insurance premiums.
• 🏦 Retirement Contributions: Contributions to retirement accounts like 401(k).
• 🤝 Other Deductions: Could include union dues, charitable contributions, etc.

Practice Quiz

1. What is the difference between gross pay and net pay?
   1. Gross pay includes only salary; net pay includes bonuses.
   2. Gross pay is before deductions; net pay is after deductions.
   3. Gross pay is after deductions; net pay is before deductions.
   4. There is no difference between gross and net pay.
2. What does FICA stand for?
   1. Federal Insurance Contributions Act
   2. Federal Income Contribution Allocation
   3. Financial Investment and Credit Administration
   4. Federal Investment and Credit Association
3. If your gross pay is $1000 and your Social Security tax rate is 6.2%, how much is deducted for Social Security?
   1. $6.20
   2. $62.00
   3. $162.00
   4. $620.00
4. Which of the following is NOT a mandatory deduction?
   1. Federal Income Tax
   2. Social Security Tax
   3. Medicare Tax
   4. Retirement Contributions
5. What form determines how much federal income tax is withheld from your paycheck?
   1. W-2
   2. 1040
   3. W-4
   4. 1099
6. Medicare tax is what percentage of your gross pay?
   1. 3.1%
   2. 6.2%
   3. 1.45%
   4. 7.65%
7. Which of these is an example of a common "other deduction"?
   1. Federal Income Tax
   2. State Income Tax
   3. Union Dues
   4. Medicare Tax