©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
EPF - Unit 5 – Taxation Questions and
Answers
Gross pay - Answers✓✓This is the total amount of money an employee earns before any
deductions are taken out. This includes regular pay, bonuses, and overtime pay.
Payroll deductions - Answers✓✓These are amounts taken out of an employee's paycheck
before the employee receives their net pay. These are typically made for various reasons,
including taxes, insurance premiums, retirement contributions, and other benefits.
Net pay - Answers✓✓This is the amount of money an employee takes home after all
deductions, such as taxes, insurance premiums, and retirement contributions, have been taken
out.
Tax rate schedule - Answers✓✓This is a table that shows the tax rate that applies to different
levels of taxable income. This data is used to calculate the amount of tax owed based on an
individual's or business's taxable income.
Social Security Tax - Answers✓✓This is a tax that funds the Social Security program and
provides retirement, disability, and survivor benefits.
Medicare Tax - Answers✓✓This is a tax that funds the Medicare program and provides health
insurance for people 65 and older and certain disabled individuals.
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Pre-tax deductions - Answers✓✓are payroll deductions that are taken out of an employee's
salary before taxes are calculated and applied. The purpose of these is to reduce an employee's
taxable income, resulting in a lower tax liability and a higher take-home pay.
401(k) - Answers✓✓This is a type of retirement savings plan offered by some employers.
Employees can contribute a portion of their pre-tax pay into this retirement plan, which is then
invested and grows tax-free until the employee withdraws the funds in retirement. Employers
may also make matching contributions.
Health insurance premiums - Answers✓✓These are the regular payments made by individuals
or their employers to a health insurance company to maintain health coverage. These payments
are used to pay for the cost of the health insurance policy.
Life insurance premiums - Answers✓✓Amounts taken out of an employee's pay to cover life
insurance costs. These amounts are used to pay for the cost of the policy, which provides a
death benefit to the policyholder's beneficiaries in the event of the policyholder's death.
Flexible Spending Account (FSA) - Answers✓✓This is a type of pre-tax benefit account that
allows employees to set aside money from their salary to pay for certain qualified medical and
dependent care expenses. The contributions to this are made through payroll deductions and are
taken out of an employee's salary before taxes are calculated, resulting in a lower taxable
income and a higher take-home pay.
Union dues - Answers✓✓These are fees that union members are required to pay to support the
activities of their union. Union dues are typically a percentage of an employee's salary, and in
some cases, the dues may be mandatory.
Tax season - Answers✓✓This is the period of time each year when individual taxpayers and
businesses are required to file their taxes with the government. This time period typically runs
from January to April.
22/11/2024 12:41PM
EPF - Unit 5 – Taxation Questions and
Answers
Gross pay - Answers✓✓This is the total amount of money an employee earns before any
deductions are taken out. This includes regular pay, bonuses, and overtime pay.
Payroll deductions - Answers✓✓These are amounts taken out of an employee's paycheck
before the employee receives their net pay. These are typically made for various reasons,
including taxes, insurance premiums, retirement contributions, and other benefits.
Net pay - Answers✓✓This is the amount of money an employee takes home after all
deductions, such as taxes, insurance premiums, and retirement contributions, have been taken
out.
Tax rate schedule - Answers✓✓This is a table that shows the tax rate that applies to different
levels of taxable income. This data is used to calculate the amount of tax owed based on an
individual's or business's taxable income.
Social Security Tax - Answers✓✓This is a tax that funds the Social Security program and
provides retirement, disability, and survivor benefits.
Medicare Tax - Answers✓✓This is a tax that funds the Medicare program and provides health
insurance for people 65 and older and certain disabled individuals.
, ©Themoon EXAM SOLUTIONS
22/11/2024 12:41PM
Pre-tax deductions - Answers✓✓are payroll deductions that are taken out of an employee's
salary before taxes are calculated and applied. The purpose of these is to reduce an employee's
taxable income, resulting in a lower tax liability and a higher take-home pay.
401(k) - Answers✓✓This is a type of retirement savings plan offered by some employers.
Employees can contribute a portion of their pre-tax pay into this retirement plan, which is then
invested and grows tax-free until the employee withdraws the funds in retirement. Employers
may also make matching contributions.
Health insurance premiums - Answers✓✓These are the regular payments made by individuals
or their employers to a health insurance company to maintain health coverage. These payments
are used to pay for the cost of the health insurance policy.
Life insurance premiums - Answers✓✓Amounts taken out of an employee's pay to cover life
insurance costs. These amounts are used to pay for the cost of the policy, which provides a
death benefit to the policyholder's beneficiaries in the event of the policyholder's death.
Flexible Spending Account (FSA) - Answers✓✓This is a type of pre-tax benefit account that
allows employees to set aside money from their salary to pay for certain qualified medical and
dependent care expenses. The contributions to this are made through payroll deductions and are
taken out of an employee's salary before taxes are calculated, resulting in a lower taxable
income and a higher take-home pay.
Union dues - Answers✓✓These are fees that union members are required to pay to support the
activities of their union. Union dues are typically a percentage of an employee's salary, and in
some cases, the dues may be mandatory.
Tax season - Answers✓✓This is the period of time each year when individual taxpayers and
businesses are required to file their taxes with the government. This time period typically runs
from January to April.
