Payroll Deductions and Net Pay Calculation Quiz

Test your understanding of payroll deductions, net pay calculation, and related regulations with these quiz questions. How well do you know payroll?

Practice Learn Test

Which of the following is typically NOT a mandatory payroll deduction?

Federal income tax

Social Security tax

Voluntary retirement contributions

State income tax

What does FICA stand for in the context of payroll deductions?

Federal Income Calculation Act

Federal Insurance Contributions Act

Financial Income and Contributions Assessment

Federal Income Compensation Association

What is the primary purpose of the Fair Labor Standards Act (FLSA)?

To establish a federal minimum wage

To regulate workplace safety

To mandate paid sick leave for employees

To govern employee retirement benefits

Which of the following is NOT a factor in determining an employee's gross pay?

Overtime hours worked

Federal income tax withholding

Hourly wage rate

Bonuses or commissions earned

What is the purpose of a Form W-2?

To report employee wages and taxes withheld to the IRS

To request a tax refund from the IRS

To apply for unemployment benefits

To report business expenses

Which of the following represents an employer's portion of FICA taxes?

6.2% of gross wages

6.2% of net pay

7.65% of gross wages

7.65% of net pay

What is the purpose of Form W-4 for employees in the United States?

To report earnings to the IRS

To request time off

To declare federal tax withholding allowances

To apply for Social Security benefits

What is the purpose of Form 941 for employers in the United States?

To report federal income tax withheld from employees' pay

To report quarterly payroll taxes to the IRS

To request an extension for filing payroll taxes

To apply for a federal tax identification number

Which of the following is considered an 'above-the-line' deduction?

Mortgage interest

Charitable contributions

Student loan interest

Medical expenses

#10

Which of the following payroll deductions is typically exempt from federal income tax?

401(k) contributions

Health insurance premiums

Union dues

Child support payments

#11

Which of the following would increase an employee's net pay?

An increase in federal income tax withholding

An increase in voluntary retirement contributions

A decrease in state income tax withholding

A decrease in Social Security tax withholding

#12

What is the penalty for an employer who fails to deposit federal payroll taxes on time?

A warning letter from the IRS

A 5% reduction in the employer's Social Security tax rate

A penalty ranging from 2% to 15% of the unpaid tax amount

No penalty, as long as the taxes are eventually paid

#13

Which of the following types of income is generally NOT subject to federal income tax withholding?

Wages from employment

Interest income

Dividend income

Tips received by a waiter

#14

Which of the following statements about pretax deductions is true?

Pretax deductions reduce an employee's taxable income

Pretax deductions increase an employee's gross pay

Pretax deductions are only applicable to federal income tax

Pretax deductions are not allowed by law

#15

What is the primary purpose of the Internal Revenue Code (IRC) in relation to payroll?

To establish payroll tax rates

To regulate federal income tax withholdings

To provide guidelines for reporting employee wages and taxes

To establish minimum wage standards