Amounts withheld from an employee's gross pay are called:

• A. Employer contributions
• B. Net pay
• C. Payroll deductions
• D. Gross earnings

Answer: (C)

Verified step by step guidance

1. Understand the concept of gross pay: Gross pay refers to the total earnings of an employee before any deductions are made, including wages, salaries, bonuses, and other compensation.
2. Learn about payroll deductions: Payroll deductions are amounts withheld from an employee's gross pay by the employer. These deductions can include taxes (e.g., federal income tax, Social Security tax), benefits (e.g., health insurance premiums, retirement contributions), and other mandatory or voluntary deductions.
3. Differentiate between employer contributions and payroll deductions: Employer contributions are amounts paid by the employer on behalf of the employee, such as matching retirement contributions or paying for health insurance. Payroll deductions, on the other hand, are subtracted from the employee's gross pay.
4. Understand net pay: Net pay is the amount an employee receives after all payroll deductions have been subtracted from their gross pay. It is also referred to as 'take-home pay.'
5. Recognize the correct term: The amounts withheld from an employee's gross pay are specifically referred to as 'payroll deductions,' as they represent the deductions made by the employer from the employee's earnings.