| A | B |
|---|
| earned income | the income you receive from employment or from self- employment. |
| wage | payment for work and is usually calculated on an hourly, daily, or piecework basis. |
| minimum wage | the lowest hourly wage that employers can pay most workers by law. |
| overtime wage | the amount paid for working time in a week that is beyond the standard 40-hour workweek. |
| piecework | a wage based on a rate per unit of work completed. |
| salary | a fixed payment for work and is expressed as an annual figure. It is paid in periodic equal payments. |
| commission | income paid as a percentage of sales made by a sales- person. |
| tip | or gratuity, is money paid for service beyond what is required. |
| bonus | money added to an employee’s base pay. |
| gross pay | or gross income, is a worker’s earnings before payroll deductions. |
| payroll deduction | a subtraction from gross pay. |
| net pay | or take-home pay, is gross pay (plus bonuses, if any) minus payroll deductions. |
| FICA taxes | or Social Security and Medicare taxes, are taxes paid by the employee and employer that are used to finance the federal Social Security and Medicare programs. |
| compensation | is the payment and benefits received for work performed. |
| employee benefit | or fringe benefit, is a form of noncash compensation received in addition to a wage or salary. |
| Form W-2 | a Wage and Tax Statement that shows your earnings and the amounts of income, Social Security, and Medicare taxes withheld from your income during the year. |
| tax deduction | an amount that is subtracted from adjusted gross income, which further reduces taxable income. |
| itemized deduction | an allowed expense that can be deducted from adjusted gross income. |
| standard deduction | a fixed amount that can be deducted from adjusted gross income. |
| exemption | an amount that a taxpayer can claim for each person who is dependent on that person’s income. |
| tax credit | an amount that can be deducted from the taxes a tax- payer owes. |
| entitlement | a government payment or benefit promised by law to eligible citizens. |
| Social Security | is a federal program that provides income when earnings are reduced or stopped because of retirement, serious illness or injury, or death. |
| Medicare | a federal program that pays for certain health-care expenses for older citizens and others with disabilities. |
| disability | a limitation that affects a person’s ability to function in major life activities. |
| Medicaid | a government program that pays certain health-care costs for eligible, low-income individuals and families. |
