Question

Match the different categories of income to the calculation used to derive them.

gross pay – deductions(blank) Adjusted Gross Pay – tax(blank) disposable income – personal spending(blank) taxable income – taxes(blank)

Terms to match=
Adjusted Gross Pay
taxable income
disposable income
savings

Answer 1

Given below

Explanation:

We have gross pay is the total pay given by the mployer.

From this standard deductions are deducted to get taxable income on which tax is imposed and subtracted. The balance is adjusted gross pay paid as salary. Adjusted gross pay will be used for personal spending and the remaining

We have the chain as

Gross pay - deductions= Adjusted gross pay

Adjusted gross pay - taxes = disposable income+savings

Disposable income - personal spending = Savings

Taxable income - taxes = disposable income

Answer 2

Gross pay – deductions = Adjusted Gross Pay

Adjusted gross income is the individual's income minus the deductions.

Adjusted Gross Pay – tax = Taxable income

Taxable income is that amount, which is left after subtracting the deductions and claiming exemptions from ones adjusted gross income.

Disposable income – personal spending = Savings

Savings is the money, that is left after spending on taxes, housing, food etc.

Taxable income – taxes = disposable income

Disposable income or net pay is the money left, after cutting out taxes.