List some of the items that are deducted from gross pay to arrive at net pay...

List some of the items that are deducted from gross pay to arrive at net pay on an employee's paycheck. Discuss the different types of taxes. Which taxes are deducted from an employee's paycheck and which taxes are the employer responsible for paying?

Expert Solution

The common items deducted grom gross pay to arrive at net pay includes different kinds of taxes, insurance payments, pension payments, union dues and donations to charities. Gross pay less deductions is called net pay.

The law requires thattaxes must be withheld from an employee's paycheck. Employers must then transmit these withholdings to various tax agencies. Tax deductions include the following:

Federal income tax withholding (based on withholding tables in Publication 15)
Social Security tax withholding (6.2 percent up to the annual maximum taxable earnings of $127,200 as of 2017)
Medicare tax withholding (1.45 percent)
Additional Medicare tax withholding (0.9 percent) for employees earning over $200,000 (this is a new tax withholding requirement starting in the year 2013)
State income tax withholding
Various local tax withholdings (such as city, county or school district taxes, state disability or unemployment insurance).

The employer portion of payroll taxes includes the following: Social Security taxes (6.2 percent up to the annual maximum) Medicare taxes (1.45 percent of wages) Federal unemployment taxes (FUTA)

ekkarill92 answered 1 year ago

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