Multiple Choice
Which of the following enables you to handle the practice's payroll without generating payroll checks manually?
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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
Which of the following deductions will typically appear on every employee's paycheck in the United States?
A
Retirement plan contributions and wage garnishments
B
Health insurance premiums and charitable contributions
C
State income tax and union dues
D
Federal income tax and FICA taxes (Social Security and Medicare)
Verified step by step guidance1
Understand the context of the problem: The question is asking about deductions that are mandatory and typically appear on every employee's paycheck in the United States.
Review the key components of payroll deductions: Payroll deductions can be categorized into mandatory deductions (required by law) and voluntary deductions (chosen by the employee). Mandatory deductions include federal income tax and FICA taxes (Social Security and Medicare).
Clarify the role of FICA taxes: FICA stands for Federal Insurance Contributions Act, which mandates contributions to Social Security and Medicare programs. These deductions are calculated as a percentage of an employee's gross wages.
Explain federal income tax deduction: Federal income tax is withheld based on the employee's earnings, filing status, and the number of allowances claimed on their W-4 form. This deduction is required for all employees.
Compare other options provided in the question: Retirement plan contributions, health insurance premiums, charitable contributions, state income tax, and union dues are either voluntary deductions or may not apply to every employee universally. Federal income tax and FICA taxes are mandatory and appear on every paycheck.
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