What term describes the amounts subtracted from earnings for taxes and other withholdings?

What term describes the amounts subtracted from earnings for taxes and other withholdings?

• A. Deductions
• B. W2
• C. Minimum wage
• D. Net pay

Answer: (A)

Deductions are the amounts subtracted from earnings to cover taxes and other withholdings. They come from gross pay and reduce it to take-home pay, also called net pay. For example, if gross earnings are $1,200 and deductions total $320, the net pay is $880. This term fits because it describes the actual items taken out of earnings, not the final pay amount (net pay), nor a tax form (W2) or the wage rate (minimum wage).

Deductions are the amounts subtracted from earnings to cover taxes and other withholdings. They come from gross pay and reduce it to take-home pay, also called net pay. For example, if gross earnings are $1,200 and deductions total $320, the net pay is $880. This term fits because it describes the actual items taken out of earnings, not the final pay amount (net pay), nor a tax form (W2) or the wage rate (minimum wage).