Multiple Choice
An employee worked 40 regular hours at $20 per hour and 5 overtime hours at $30 per hour during the week. What is the employee's gross pay for the week?
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9. Current Liabilities
Payroll and Payroll Taxes
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
How does payroll withholding benefit a company's employees?
A
It increases the net pay employees receive each pay period.
B
It allows employees to receive their full gross pay without any deductions.
C
It eliminates the need for employees to file annual tax returns.
D
It ensures that required taxes are automatically deducted and remitted to the government on behalf of employees.
Verified step by step guidance1
Understand the concept of payroll withholding: Payroll withholding refers to the process where an employer deducts a portion of an employee's gross pay to cover taxes and other required contributions, such as Social Security and Medicare.
Recognize the benefit to employees: Payroll withholding ensures that employees do not have to manually calculate and remit their taxes to the government. This simplifies the tax payment process for employees.
Identify the automatic deduction process: Employers automatically deduct the required taxes from employees' paychecks and remit them to the government, ensuring compliance with tax laws.
Clarify the impact on annual tax returns: While payroll withholding simplifies tax payments, employees may still need to file annual tax returns to reconcile their tax liability and claim any refunds or pay additional taxes owed.
Conclude the primary benefit: The main advantage of payroll withholding for employees is that it ensures required taxes are deducted and remitted to the government on their behalf, reducing the burden of manual tax management.
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