Multiple Choice
Which deduction from your paystub is typically paid back to you at a later date?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following is required to be withheld from an employee's gross pay?
A
Employer's portion of Social Security tax
B
State unemployment tax (SUTA)
C
Worker's compensation insurance
D
Federal income tax
Verified step by step guidance1
Understand the concept of payroll deductions: Payroll deductions are amounts withheld from an employee's gross pay by the employer to cover taxes and other obligations. These deductions can include mandatory taxes and voluntary contributions.
Identify mandatory deductions: Federal income tax is a mandatory deduction that employers are required to withhold from an employee's gross pay. This is based on the employee's earnings and the information provided on their W-4 form.
Clarify employer-paid expenses: The employer's portion of Social Security tax, state unemployment tax (SUTA), and worker's compensation insurance are not withheld from the employee's gross pay. These are expenses paid directly by the employer and do not affect the employee's paycheck.
Distinguish between employee and employer responsibilities: Federal income tax is the responsibility of the employee and is withheld from their gross pay, while the other items listed are employer obligations and are not deducted from the employee's pay.
Conclude the correct answer: Based on the analysis, the only item required to be withheld from an employee's gross pay is the federal income tax.
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