Question

Deductions from employee pay for contributions toward retirement savings plans and contributions for charitable organizations are examples of?

1) Employee benefits
2) Employee expenses
3) Employee liabilities
4) Employee contributions

Answer 1

Deductions for retirement savings and charitable contributions from an employee's wages classify as Employee contributions, which are part of defined contribution plans like 401(k)s, tax-deferred, and portable between jobs.

Step-by-step explanation:

Deductions from an employee's pay for contributions toward retirement savings plans and for charitable organizations are examples of Employee contributions. These contributions are often part of defined contribution plans such as 401(k)s and 403(b)s. Employers usually make a fixed contribution to these plans on each paycheck, and employees can contribute as well. Contributions are typically invested in various financial vehicles and are tax-deferred, meaning taxes are not paid on the funds until they are withdrawn during retirement. Additionally, these plans are portable, allowing employees to retain their benefits when changing employers.