Question

Employees who do not render an adequate accounting to the employer but are fully reimbursed will shift the 50% cutback adjustment to their employer.

a. True
b. False

Answer 1

The statement is false; employers and employees split payroll taxes, though employees might bear the cost indirectly through lower wages.

Step-by-step explanation:

The statement that employees who do not provide an adequate account to their employer but are fully reimbursed will shift the 50% cutback adjustment to their employer is false. Typically, in payroll tax arrangements, both the employer and the employee split payroll taxes, with visible deductions on the employee's paycheck for Social Security and Medicare. However, economists suggest that the employer's share of the taxes may be indirectly passed back to the employees through lower wages, meaning the employees might effectively bear the full brunt of payroll taxes.