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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Deductions
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Social security
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Detailed explanation-1: -Net salary is the total salary one gets after all the mandatory deductions such as taxes that are made from the total gross salary. This is the total amount that gets credited to the bank account of the employee after all the deductions are done.
Detailed explanation-2: -Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.
Detailed explanation-3: -Only a portion of an employee’s costs are directly paid to the employee. Net pay refers to the amount an employee takes home, not the amount it costs to employ them. Retirement plan contributions, employee benefits, and employer FICA taxes are deducted before an employee receives their net pay.
Detailed explanation-4: -Net salary is the amount of money calculated after tax deduction and other deductions like Public Provident Fund, Professional Tax, etc. Individuals with a salary up to Rs. 5, 00, 000/-p.a. are not required to pay any taxes, as they get rebates under section 87A up to Rs. 12, 500/-.
Detailed explanation-5: -Net pay means take-home pay or the amount employees earn after all payroll deductions are subtracted from their gross pay.