Chapter 4: Your Take-home Pay

credit union

a savings and loan business that offers services to company employees and other groups

401(k) plan

a type of retirement plan into which an employee contributes money from each paycheck; employers may also make a contribution

savings bond

a way to save money; the purchase price of a savings bond is repaid wtih interest when the bond is sold

gross pay

amount of money earned by an employer

net pay

amount of money received after deductions have been taken

withheld

kept out; for example, money withheld from a salary

tax

money paid to the local, state, or federal government

deduction

money taken from gross pay for things such as taxes, health insurance, or union dues

exemption

reduction in your income tax for each person you support, including yourself

W-2 form

a federal tax form that shows your income for a year

interest

the money a bank pays you for keeping your money there

earnings statement

the paycheck stub listing gross pay, deductions, and net pay