Chapter 9, Problem 1CR

Gross pay is the amount of earnings before payroll _____ are withheld; net pay is the actual amount of the _____. (9.1)

To determine

To fill: The blank spaces in the statement, “ Gross pay is the amount of earning before payroll ___ are withheld; net pay is the actual amount of the ____”.

Answer to Problem 1CR

Solution:

The complete statement is “Gross pay is the amount of earning before payroll deductions are withheld; net pay is the actual amount of the Employee’s paycheck after all payroll deductions”.

Explanation of Solution

The relations between gross pay and net pay is given below:

$\text{Net pay = gross pay – total deductions}$

The term gross pay or gross earning refers to the amount of earnings which employees receive before any taxes and deductions are taken out.

Thus, the net pay or take-home pay is the actual amount of money which employees take home after all payroll deductions have been withheld.