BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Pay before deductions are taken out
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Pay after deductions are taken out
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A deduction
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Weekly pay
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Detailed explanation-1: -Gross salary is the monthly (or annual) salary paid to an employee without any tax deductions. Basic salary is the salary paid to an employee before the addition of any benefits like allowances or perquisites. Gross salary includes bonuses, overtime pay, allowances, and other perks.
Detailed explanation-2: -FICA payroll tax As an employer, you pay half of this tax (7.65 percent), and your employee pays the other half. The employee’s portion is deducted from their gross pay. Of the employee portion, 6.2 percent goes towards Social Security tax and 1.45 percent goes toward Medicare tax.
Detailed explanation-3: -Deductions from Gross Salary For calculation of Income Tax, gross salary minus the eligible deductions are considered. For example, you will have to deduct HRA exemption, any home loan EMI, investments under sections 80C and 80D, and similar such things for the calculation of taxable income.