Multiple Choice
Which of the following would affect an employee's net pay?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following is NOT a typical example of a deduction taken from your paycheck?
A
401(k) retirement plan contribution
B
Social Security tax
C
Sales tax on groceries
D
Federal income tax
Verified step by step guidance1
Understand the concept of paycheck deductions: Paycheck deductions are amounts subtracted from an employee's gross pay to cover taxes, benefits, and other contributions.
Identify typical paycheck deductions: Common examples include contributions to retirement plans (e.g., 401(k)), Social Security tax, and federal income tax. These are mandatory or voluntary deductions directly related to employment income.
Clarify the nature of sales tax: Sales tax is a tax imposed on the purchase of goods and services, such as groceries, and is paid at the point of sale. It is not deducted from an employee's paycheck.
Compare paycheck deductions with sales tax: Paycheck deductions are tied to employment income, while sales tax is tied to consumer purchases. Sales tax is not a typical deduction from a paycheck.
Conclude that sales tax on groceries is not a paycheck deduction: Since sales tax is unrelated to employment income and is paid separately during purchases, it does not qualify as a typical paycheck deduction.
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