Certified Payroll Professional Practice Exam 2025 – Your All-in-One Guide to Exam Success

Question: 1 / 400

Define "deductions" in payroll.

Payments made to employees for overtime

Amount of additional pay received by employees

Amounts withheld from an employee's gross pay, such as taxes, insurance, and retirement contributions

Deductions in payroll refer to amounts that are withheld from an employee's gross pay before they receive their net pay. This includes various components such as federal and state taxes, Social Security and Medicare taxes, health insurance premiums, retirement contributions, and other voluntary or mandatory deductions.

Understanding deductions is critical for payroll processing, as these withholdings reflect an employee's tax obligations and contributions to benefits that impact their financial planning and net income.

The other options relate to payments or additional compensation to employees but do not match the definition of deductions. For instance, payments for overtime and bonuses are forms of earnings rather than amounts withheld. Thus, the definition capturing the withholdings from an employee's gross pay accurately describes what deductions are in a payroll context.

Get further explanation with Examzify DeepDiveBeta

Additional bonuses paid to employees

Next Question

Report this question

Download Certified Payroll Professional Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy