Unit 4 Employment and Income Vocabulary

Vocabulary flashcards covering employment concepts, types of pay, tax deductions, and standard tax forms from Unit 4.

Soft Skills

A set of versatile abilities and aptitudes that are applied to personal and professional roles and are transferrable to any job.

Hard Skills

Specific skills that are obtained through formal education, training, and experiences that are needed to perform certain jobs.

Income

Any form of money, property, or services that you earn or receive from any source and subject to Federal and State taxes.

Wages

A set amount of money an individual earns for work completed. This is paid on a regular basis such as daily or weekly.

Salary

A set amount of money earned per pay period. It is usually described as the amount of money made per year.

Hourly Wage

A specific wage rate based on each hour worked, which is subject to a minimum rate per Federal and State guidelines and requires overtime rate when the number of hours worked exceeds 40 hours per week.

Gross Pay

This is the total amount of money earned before taxes and deductions are taken out of an employee’s paycheck.

Net Pay

This is the total amount of money earned after taxes and deductions are taken out of your paycheck.

FICA

Federal Insurance Contributions Act is a payroll tax on both the employee and employer to pay for Social Security and Medicare.

Social Security

A payroll tax that pays benefits for people who have retired, disabled people, and dependents of workers who have died.

Medicare

A payroll tax that pays for health care for people over 65.

Workers Compensation

Form of insurance that provides wage replacement and medical benefits to employees who are injured or become ill as a direct result of their job.

Unemployment Insurance

A joint federal-state program that provides temporary financial assistance to eligible workers who have become unemployed through no fault of their own. It is funded by taxes paid by employers, and each state has its own guidelines for eligibility, benefit amounts, and the duration of payments.

Payroll Deductions

Money withheld from an employee's total earnings (gross pay) by their employer. These deductions are used to pay for mandatory deductions (required by law, such as federal, state, and local income taxes, as well as Social Security and Medicare taxes (FICA); and voluntary deductions (optional and are chosen by the employee. Examples include contributions to a retirement plan (like a 401(k)), health insurance premiums, or life insurance payments).

Direct Deposit

Method of payment where funds are electronically transferred by a payer directly into a payee's bank account. It is most commonly used by employers to pay salaries and wages, and it provides a fast, secure, and convenient alternative to a traditional paper paycheck.

Employee Benefits

Products or services that add value beyond wages earned.

Pay Stub

Provided by an employer to an employee for each pay period. It details how the employee's total pay (gross pay) was calculated and shows all of the deductions that were taken out, resulting in the final amount of money the employee receives (net pay or take-home pay).

Full Time/Permanent Employment

Someone who works the full time required for the job (sometimes 40 hrs.per week), are sometimes paid by salary and have access to full benefits.

Part-Time Employment

Someone who usually work less than 30 hours per week and are paid hourly. May not have access to full benefits.

Temporary Employment

Someone hired on a short-term basis, sometimes to cover a full- time employee who is absent; typical for seasonal jobs.

Contractor

Someone who works as a contract employee but is not on a company's payroll. There are no benefits and no tax withholding, but the employee must file taxes as a business.

Gig Economy

General workforce environment in which short-term engagements, temporary contracts, and independent contracting is commonplace.

I-9 Form

A Form issued by the Dept of Homeland Security that requires an employer to verify an employee’s identity and legal authorization to work in the United States. Employees must provide the required proof of identity (e.g. passport, drivers license and birth certificate).

W-4 Form

This is a tax form employees use to tell their employer how much federal income tax to withhold from their paycheck based on the number of allowances that claim.

W-2 Form

This is a tax form that employers are required to send their employees each year. This form reports the total annual salary or wages and the amount of taxes withheld from their paychecks.

1040 Form

A U.S. Federal tax form is used to file (send) a person’s individual taxes to the IRS and is used to determine the amount of Federal income tax owed in a single year.

1099 Form

This is a tax form that summarizes any non-employment income such as interest, dividends, or other miscellaneous income earned that must be reported on a tax return.