Chapter 2:Household Incomd

Question 1

What is income

Answer 1

Income is money received by a person or coming into a household.

Question 2

List the main source of income for a household

Answer 2

Wages and salaries are the main source and they are income received as a reward of work

Question 3

Explain the difference between regular and irregular income

Answer 3

For example, a salary. Irregular: Income that an individual or household may or may not receive. For example, a bonus

Question 4

Define the term BIK

Answer 4

Benefit in Kind (BIK) system is a way for employers to provide non-cash benefits to their employees for example a company car

Question 5

Differentiate between statutory and voluntary deductions

Answer 5

Statutory deductions — what the tax authorities collect e.g PAYE

Voluntary paycheck deductions are taken for programs in which individuals participate voluntarily, e.g., health insurance

Question 6

Differentiate between a wage and a salary

Answer 6

A salary is a fixed annual payment as a reward for work

A wage is a payment received for work done

Question 7

Gross pay??

Answer 7

Gross pay - The employee’s income before anything is deducted from it

Question 8

Net pay =

Answer 8

= Gross pay - Total deductions.