| A | B |
|---|
| 401(k) | A qualified retirement plan sponsored by an employer |
| commission | A method of paying an employee based on the amount of sales the employee generates. Commissions are normally calculated as a percent of an employee’s sales. |
| direct deposit | he payment of an employee’s net pay using electronic funds transfer. |
| electronic funds transfer | A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents. |
| individual retirement account | A qualified retirement plan that provides most individuals with a deferred federal income tax benefit |
| Medicare tax | A federal tax paid for hospital insurance. |
| net pay | The total earnings paid to an employee after payroll taxes and other deductions. |
| qualified retirement plan | A retirement plan approved by the Internal Revenue Service. |
| Roth individual retirement account | A qualified retirement plan that allows tax-free withdrawals from the account. |
| social security tax | A federal tax paid for old-age, survivors, and disability insurance. |
| tax base | the maximum amount of earnings on which a tax is calculated |
| withholding allowance | A deduction from total earnings for each person legally supported by a taxpayer, including the employee. |
