Skip to main content
Pearson+ LogoPearson+ Logo

Payroll and Payroll Taxes definitions Flashcards

Payroll and Payroll Taxes definitions
Control buttons has been changed to "navigation" mode.
1/15
  • Gross Pay
    Total earnings of an employee before any deductions such as taxes or benefits are withheld.
  • Net Pay
    Amount an employee receives after all deductions, including taxes and benefits, are subtracted from gross earnings.
  • Salary Expense
    Total cost to a company for compensating employees, including wages, taxes, and benefits.
  • Payroll Liabilities
    Obligations a company owes for amounts withheld from employees' paychecks and employer payroll taxes.
  • Federal Income Tax
    Mandatory deduction from employee earnings, remitted by the employer to the U.S. government.
  • State Income Tax
    Deduction from employee pay required by certain states, varying by location and remitted by the employer.
  • FICA Tax
    Combined Social Security and Medicare taxes, with both employee and employer contributing 7.65% of gross pay.
  • Social Security
    Federal program funded by payroll taxes, providing retirement and disability benefits to eligible workers.
  • Medicare
    Federal health insurance program for individuals 65 and older, funded through payroll tax contributions.
  • Unemployment Taxes
    Employer-paid taxes supporting federal and state programs for workers who lose their jobs.
  • FUTA
    Federal tax paid by employers, calculated as 6.2% of the first $7,000 of each employee's annual earnings.
  • SUTA
    State-level unemployment tax paid by employers, with rates and rules varying by state.
  • Employee Benefits
    Non-wage compensation such as health insurance or retirement plans, often resulting in additional payroll withholdings.
  • 401(k) Plan
    Employer-sponsored retirement savings account allowing employees to contribute pre-tax earnings.
  • Withholding
    Portion of employee earnings retained by the employer to cover taxes and other deductions before payment.