What types of taxes and deductions are factored into the difference between your gross pay and your net pay?
Some common taxes and deductions that are factored into the difference between gross pay and net pay include:
1. Federal income tax: This is a tax on individuals' income that is collected by the federal government.
2. State income tax: Some states have their own income tax that is separate from federal income tax.
3. Social Security tax: This is a tax that is collected to fund the Social Security program, which provides benefits to retirees, disabled individuals, and survivors.
4. Medicare tax: This tax funds the Medicare program, which provides health insurance for individuals age 65 and older, as well as some younger people with disabilities.
5. Local taxes: Depending on where you live, you may also have local taxes that are deducted from your pay.
6. Retirement contributions: If you contribute to a retirement plan through your employer, those contributions will be deducted from your pay.
7. Health insurance premiums: If you have health insurance through your employer, the premiums for that insurance may be deducted from your pay.
8. Other deductions: Other deductions may include contributions to a flexible spending account, union dues, or other voluntary deductions.