BANKING AFFAIRS

Detailed explanation-1: -Payroll deductions are the wages taken from an employee’s total earnings to pay for things like taxes, garnishments, and benefits such as health insurance. The difference between the gross and net pay is due to these withholdings, which may include taxes on income Taxes for social security 401 (k) contributions.

Detailed explanation-2: -It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. Your nine-digit number helps Social Security accurately record your covered wages or self-employment. As you work and pay FICA taxes, you earn credits for Social Security benefits. How much is coming out of my check? 6.2%

Detailed explanation-3: -FICA taxes are a combination of Social Security and Medicare taxes that total 15.3% of your earnings. You are responsible for half of the total bill (7.65%), which includes a 6.2% Social Security tax and 1.45% Medicare tax on your earnings.

Detailed explanation-4: -Usually, FICA applies to all taxable compensation (salary, wages, commissions, bonuses, tips), including taxable fringe benefits (e.g., reimbursement for moving expenses, taxable prizes and awards) and salary reduction amounts for contributions to 401(k)s and similar plans.