7. Net pay is what remains after voluntary and required deductions are subtracted from gross pay
8. Total money earned before deductions Some deductions are required Some may be voluntary
9. Net pay results when deductions such as the following are subtracted from gross pay: Federal Insurance Contributions Act (FICA) contributions State and Federal Taxes Insurance Savings Retirement Medical reimbursement (pre-tax deduction) Child care reimbursement
10. Employees may have a variety of benefits and incentives to consider
11. Benefits are part of an employees compensation, over and above wages or salary. They add to the financial value of the job Examples of benefits: Matching contributions to tax-sheltered annuities, such as 401(k) and 403(b) retirment savings plans Savings plans Parking Health insurance plans (medical, dental) Child care Elder care Paid vacation Paid sick days Profit sharing
12. Incentives are offered as motivation for employees to perform well and may include: Bonuses Profit sharing Free travel or merchandise
13. The information a worker provides on the W-4 form impacts federal tax deductions and personal income
14. The information provided on the W-4 form determines how much is withheld from ones gross pay.