What term describes the amounts subtracted from your paycheck?

What term describes the amounts subtracted from your paycheck?

• A. Minimum wage
• B. Deductions
• C. Gross pay
• D. Compensation

Answer: (B)

Deductions are the amounts taken out of your paycheck. They reduce your gross pay to give you your net pay, and they include items like taxes, Social Security and Medicare, health insurance premiums, retirement contributions, and other withholdings. Understanding this helps you see why your take-home amount is smaller than what you actually earned. Minimum wage is the lowest legal pay rate, not what’s subtracted. Gross pay is the total earnings before any withholdings. Compensation refers to the overall pay and benefits you receive, not the amounts deducted.

Deductions are the amounts taken out of your paycheck. They reduce your gross pay to give you your net pay, and they include items like taxes, Social Security and Medicare, health insurance premiums, retirement contributions, and other withholdings. Understanding this helps you see why your take-home amount is smaller than what you actually earned. Minimum wage is the lowest legal pay rate, not what’s subtracted. Gross pay is the total earnings before any withholdings. Compensation refers to the overall pay and benefits you receive, not the amounts deducted.