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Withheld Is Known As Gross Wages. Because Gross Wages Are Calculated Before Deductions, The

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Kyana Cassandra Palomo
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13 views

Withheld Is Known As Gross Wages. Because Gross Wages Are Calculated Before Deductions, The

Uploaded by

Kyana Cassandra Palomo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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US Payroll

US Payroll is compose of Gross wages / Payroll includes salaries, wages, deductions, bonuses and net
pay.

What Are Gross Wages? The pay an employee receives before taxes and deductions are
withheld is known as gross wages. Because gross wages are calculated before deductions, the
actual take-home pay (also known as 'net wages') of an employee may be significantly less than
their gross wage.

Statutory deduction

 Federal income taxes


 Social Security
 Medicare Insurance
 State tax Or sometimes local tax depends on the state example Pensylvannia

Federal Income Tax Withholding (FITW) refers to federal income tax that is
withheld from wages at the time of payment. Also refers to wages and benefits
that are subject to federal income tax withholding.

Social security is the protection that a society provides to individuals and households to ensure


access to health care and to guarantee income security, particularly in cases of old age,
unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.

These are the basic withholdings that must be taken from every worker’s
paycheck. Yet the amount of money deducted depends on various
factors including income, number of dependents and filing status.

2 types of pay type

Hourly employees

Salaried employees (80 hours maximum no overtime)


What tax considerations are there?
In the US, Federal income tax is deducted from all citizens and residents and is
determined by individual income levels. Most employees have this tax deducted
automatically from each paycheck they receive (Pay-As-You-Go system).

In addition to Federal income tax, the majority of states also enforce state and local
income tax which is levied by individual state governments. These can vary greatly from
state-to-state, each flexing a degree of autonomy. However, there are seven states that
do not impose State income tax, including: Wyoming, Washington, Texas, South
Dakota, Nevada, Florida, and Alaska.

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