Multiple Choice
Which of the following is a mandatory payroll deduction?
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following payroll deductions is required by law?
A
Union dues
B
Retirement plan contributions
C
Charitable contributions
D
Federal income tax withholding
Verified step by step guidance1
Understand the concept of payroll deductions: Payroll deductions are amounts withheld from an employee's paycheck by the employer. These deductions can be mandatory (required by law) or voluntary (chosen by the employee).
Identify mandatory payroll deductions: Mandatory deductions are those required by law, such as federal income tax withholding, Social Security tax, and Medicare tax. These deductions are non-negotiable and must be withheld by the employer.
Differentiate between voluntary and mandatory deductions: Voluntary deductions include items like union dues, retirement plan contributions, and charitable contributions. These are optional and depend on the employee's preferences or agreements.
Focus on the required deduction in the problem: Among the options provided, federal income tax withholding is the only deduction mandated by law. The other options (union dues, retirement plan contributions, and charitable contributions) are voluntary deductions.
Conclude the reasoning: Federal income tax withholding is required by law to ensure compliance with tax regulations. Employers are obligated to withhold this amount from employees' paychecks and remit it to the government.
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