BUSINESS ADMINISTRATION
OFFICE MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Detailed explanation-1: -Mandatory deductions: Federal and state income tax, FICA taxes, and wage garnishments. Post-tax deductions: Garnishments, Roth IRA retirement plans and charitable donations. Voluntary deductions: Life insurance, job-related expenses and retirement plans.
Detailed explanation-2: -Your employer’s contributions to your Group RRSP are considered earned and taxable income. However, just like contributions to an individual RRSP, contributions to a Group RRSP – whether made by you or matched by your employer – are tax-deductible to you.
Detailed explanation-3: -Tax paid by the employer on behalf of the employee is a perquisite under Section 17(2)(iv) i.e. a non-monetary perquisite. Non-monetary perquisite forms part of the salary as per Section 17(1)(iv).
Detailed explanation-4: -The employer deducts TDS on salary at the employee’s ‘average rate’ of income tax. It will be computed as follows: Average Income tax rate = Income tax payable (calculated through slab rates) divided by employee’s estimated income for the financial year.