Financial Literacy Net Income

federal income tax

Money withheld by an employer from an employee’s paycheck to pay federal government taxes.

withholding allowance

The number of people an employee supports, which helps employers know how much money to withhold for federal income tax

exemption

Withholding allowances, which allow for supporting yourself, your spouse, and others in your family who are your dependents

social security

A federal government program to pay for retirement and disability benefits

medicare

A federal government program to provide medical insurance

group insurance

Health insurance offered by many businesses to employees, paid in part by the business and in part by the employee.

net pay

The amount of money you have left after your employer subtracts all tax withholdings and personal deductions from your gross pay, also called net income or take-home pay

straight-time pay

The total amount of money you earn for a pay period at the regular hourly rate

piecework

A worker receives a specified amount of money for each item of work completed

weekly time card

A daily record of the time you report to work and the time you depart

commission

The amount of money paid for selling a product or service

commission rate

A specified amount of money paid for each sale or a percent of the total value of sales

straight commission

Pay that consists of only money earned from sales

Graduated commission