Which items are included in common payroll deductions?

Which items are included in common payroll deductions?

• A. Purchases, depreciation, interest.
• B. Federal/state taxes, Social Security, retirement, health insurance.
• C. Cash, inventory, accounts receivable.
• D. Revenue, expenses, net income.

Answer: (B)

When thinking about payroll, deductions are amounts taken out of an employee’s gross pay to cover taxes and benefits. The common items deducted include federal and state income taxes, the Social Security portion of payroll taxes, retirement contributions, and health insurance premiums. These withholdings reduce the take-home pay but are routine parts of paying employees. Items like purchases, depreciation, and interest relate to costs, asset values, or financing for the business—not taken from an employee’s paycheck. Cash, inventory, and accounts receivable are balance sheet accounts, not payroll deductions. Revenue, expenses, and net income are income statement figures, describing the company’s performance, not amounts withheld from pay. Therefore, the deductions that appear for most employees are federal/state taxes, Social Security, retirement, and health insurance.

When thinking about payroll, deductions are amounts taken out of an employee’s gross pay to cover taxes and benefits. The common items deducted include federal and state income taxes, the Social Security portion of payroll taxes, retirement contributions, and health insurance premiums. These withholdings reduce the take-home pay but are routine parts of paying employees.

Items like purchases, depreciation, and interest relate to costs, asset values, or financing for the business—not taken from an employee’s paycheck. Cash, inventory, and accounts receivable are balance sheet accounts, not payroll deductions. Revenue, expenses, and net income are income statement figures, describing the company’s performance, not amounts withheld from pay. Therefore, the deductions that appear for most employees are federal/state taxes, Social Security, retirement, and health insurance.