Unit 6 Vocabulary (Income & Taxes)

wage

The amount paid to an employee for every hour worked.

salary

A fixed annual(yearly) sum of money divided among equal pay periods

commission

A method of paying an employee based on the amount of sales the employee generates. Commissions are normally calculated as a percent of employee sales.

$500

If you sell $5,000 worth of items and earn a 10% commission, how much money would you make?

payroll

The total amount earned by all employees for a pay period.

time clock

A device used to record the dates and times of every employee's arrivals and departures.

pay period

The number of days or weeks of work covered by an employees paycheck.

biweekly

employees are paid every two weeks. 26 times a year

weekly

employees are paid every week. 52 times a year

Medicare Tax

Tax withheld to pay for medical care for retired persons

gross pay, gross wages, or gross earnings

Total earnings.

overtime

pay earned for working more than 40 hours a week.

fair Labor Standards Act

This act requires most businesses involved in interstate commerce to pay employees at least 1½ times the normal hourly rate for hours worked in excess of 40 hours per week.

time and a half

is payment to a worker (or workers) at 1.5 times their usual hourly rate.

Entrepreneur

A person who takes the risks of being self-employed and owning a business

Net pay

The amount an employee receives after deductions have been subtractd

Benefits

Forms of pay other than salary and wages

Disposable Income

Money that is available to spend or save after taxes have been paid

Personal Leave

Paid time away from work for personal reasons

Sick Leave

Paid time away from work due to illness

Dividends

A portion of a corporation's profits shared with stockholders

Excise Taxes

Taxes charged on the purchase of specific good and services

In-cash Payments

Money in the form of a check, debit card, or other direct payment to a person needing assistance

In-kind payments

Payments made indirectly or in a form other than money

Property Taxes

Wealth taxes based on the value of owned real estate

Sales Tax

Taxes added to the purchase price of goods and services

Transfer Payments

Money and benefits received from local, state or federal governments

Unearned Income

Money received from sources other than working

Use Tax

Taxes based on the use of goods and services, such as parks

Dependent

A person who depends on you for more than half of his or her support

FICA

Social Security tax and Medicare combined

Required Taxes

Federal, state, social security and medicare

Retirement Plans

401K and 403B

W-4

Employee's Withholding Allowance Certificate form to be filled out before you start working

I-9

Employment Eligibility Verification form shows that you are eligible to work in the United State

W-2

A form used to report taxable income a worker received during the calendar year.

Exemption

A person claimed as a dependent on a tax return

3

The number of W-2 copies you will receive from your employer

April 15

Tax Day - the last day to file your income tax return

Workers' Compensation

An insurance plan that pays medical and disability benefits to employees who are injured on the job