Georgia Assessments for the Certification of Educators GACE Practice Test

Only full-time employees of Scott Smith's company have health insurance and 401k benefits deducted from their paychecks. Based on the number of hours Smith worked from November 1st through November 7th, which of the following is a correct list of his payroll deductions if he is a W-4 employee?

1. 401k and health insurance

2. None of the above

3. Social security and Medicare

4. Social security, Medicare, and income taxes

The correct answer is: Social security, Medicare, and income taxes

The correct answer is that Scott Smith's payroll deductions as a W-4 employee would include Social Security, Medicare, and income taxes. As a W-4 employee, the payroll system utilized by the company is required to withhold certain deductions based on federal regulations. Social Security and Medicare taxes are mandatory payroll taxes that employers must deduct from all employees' wages. The Social Security tax contributes to the federal benefits program that provides retirement benefits, disability income, and survivor benefits, while Medicare tax helps fund the Medicare program, which provides health coverage to individuals aged 65 and older and certain younger people with disabilities. Additionally, income tax withholding is also applicable to W-4 employees. Employees fill out a W-4 form to indicate their filing status and the number of allowances they claim, which directly impacts how much federal income tax is deducted from their paychecks. This reflects the typical deductions for a W-4 employee regardless of their full-time status regarding benefits such as health insurance and 401k, which are not mandated deductions and therefore do not apply here. Hence, payroll deductions in this case are strictly for federal taxes, leading to the conclusion that Social Security, Medicare, and income taxes would indeed be withheld from Smith's paycheck during that time