Which of the following is the correct sequence for computing net pay?
A) Compute gross pay, deduct taxes, and add voluntary deductions.
B) Compute gross pay, deduct pre-tax amounts, compute FICA, deduct taxes, and deduct post-tax amounts.
C) Compute gross pay then deduct withholding and add FICA taxes to obtain net pay.
D) Compute gross pay, compute FICA, deduct pre-tax amounts, and deduct taxes.

Question

Quizplus · Accepted Answer

When computing net pay, it is important to first calculate the employee's gross pay. From there, pre-tax deductions should be subtracted. After that, the employer must compute the FICA taxes withheld from the paycheck, deduct taxes, and deduct any post-tax deductions, such as retirement contributions or wage garnishments. Therefore, option B is the correct sequence for computing net pay.

Which of the Following Is the Correct Sequence for Computing