Final answer:
The inclusion of employees' gross income refers to total earnings before deductions, and net annual income is calculated by subtracting taxes and contributions from the gross income. Taxes vary based on employment status, with corporation owners paying different taxes than self-employed individuals. Social Security tax is regressive.
Step-by-step explanation:
Understanding Gross Income Inclusion
The 'inclusion of employees' gross income' refers to the total earnings of an employee before any deductions like taxes, Social Security, and Medicare are taken out. To calculate this, one needs to know the gross annual income for each job position. For instance, if you were to look at a 'financial analyst', a 'customer care' representative, or a 'school custodian', their gross incomes would likely differ based on their respective salaries and bonuses before any deductions.When considering different job positions, one must calculate the net annual income by subtracting taxes, Social Security at 6.2%, and Medicare at 1.45% from the gross annual income. The result is then divided by 12 to determine the monthly income. This helps in comparing different job options and understanding which fits best for covering one's expenses, such as those described in the hypothetical scenario of an individual moving out of their parent's house.It's worth noting that various tax types affect an individual's take-home pay differently. For example, if one is self-employed or the sole employee of their own corporation, they would be responsible for corporate income tax, individual income tax on their salary, and payroll tax. Additionally, the type of tax, like Social Security, can be described as regressive, progressive, or proportional. In this case, with a rate of 6.2% on income below $113,000, it is considered a regressive tax.