Multiple Choice
Employers' responsibilities for payroll do not include:
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9. Current Liabilities
Payroll and Payroll Taxes
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Which of the following is NOT a payroll tax deduction?
A
Federal income tax
B
Social Security tax (FICA)
C
Charitable contributions
D
Medicare tax
Verified step by step guidance1
Understand the concept of payroll tax deductions: Payroll tax deductions are amounts withheld from an employee's paycheck by the employer to cover taxes and other obligations. Common payroll tax deductions include federal income tax, Social Security tax (FICA), and Medicare tax.
Review the listed options: Federal income tax, Social Security tax (FICA), Medicare tax, and Charitable contributions.
Identify the nature of each deduction: Federal income tax, Social Security tax (FICA), and Medicare tax are mandatory payroll tax deductions required by law. Charitable contributions, on the other hand, are voluntary deductions and not classified as payroll taxes.
Clarify why charitable contributions are not payroll tax deductions: Charitable contributions are optional amounts that employees may choose to donate to a charity, often facilitated by the employer. These are not taxes but voluntary deductions.
Conclude that the correct answer is 'Charitable contributions' because it does not fall under the category of mandatory payroll tax deductions.
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