Pay, Benefits, and Taxes Unit Review

Vocabulary flashcards covering key terms from the Pay, Benefits, and Taxes Unit Review.

Benefits

Extra compensation from an employer, such as health insurance, paid vacation, and retirement plans.

Collective bargaining

Negotiations between a labor union and an employer about wages, benefits, and working conditions.

Compressed workweek

Working the usual number of weekly hours in fewer days.

Flextime

A work schedule that allows employees flexibility in when they start and finish work.

Gross pay

The total amount of money earned before deductions.

Job rotation

Moving employees between different jobs or tasks to develop skills and experience.

Job sharing

Two employees sharing the responsibilities and hours of one full-time position.

Labor union

An organization of workers that represents employees in negotiations with employers.

Net pay

The amount of money an employee receives after deductions; also called take-home pay.

Overtime

Hours worked beyond the standard 40-hour workweek for eligible employees, generally paid at a higher rate.

Salary

A fixed amount of pay, usually stated annually.

Hourly wage

Pay based on the number of hours worked.

Adjusted gross income

Gross income minus certain allowed adjustments.

Deductions

Expenses or amounts that reduce the income subject to taxation.

Exemption

An amount or category excluded from taxation. Personal exemptions are currently suspended for federal income tax purposes.

Progressive taxes

Taxes in which higher-income taxpayers generally pay a higher tax rate.

Proportional taxes

Taxes that apply the same tax rate to everyone, regardless of income.

Regressive taxes

Taxes that take a larger percentage of income from lower-income individuals than from higher-income individuals.

Standard deduction

A fixed amount taxpayers can subtract from income to reduce taxable income.

Tax credit

An amount that directly reduces the taxes owed.

Tax evasion

Illegally avoiding paying taxes, such as hiding income or falsifying tax information.

Taxable income

Income remaining after allowable deductions and adjustments, used to calculate income tax.

IRS

Government agency whose purpose is to administer and enforce federal tax laws and collect federal taxes.

Voluntary compliance

The system principle where taxpayers are responsible for honestly reporting their income, calculating their taxes, and paying what they owe.

W-2 form

A form used to report an employee's annual wages and the taxes withheld from their paycheck.