Chapter 2: Income, Benefits and Taxes (2-1: Earned Income and Benefits)

Question 1

The lowest pay rate allowed by law for each regular hour of work

Answer 1

Minimum Wage

Question 2

Pay received for hours worked in addition to regular hours

Answer 2

Overtime Pay

Question 3

A set fee or percentage of a sale paid to an employee instead of or in addition to salary or wages

Answer 3

Commission

Question 4

A person who takes the risks of being self-employed and owning a business

Answer 4

Entrepreneur

Question 5

A business where the owner intends to keep the business small

Answer 5

Lifestyle Business

Question 6

A secondary occupation an employee enjoys in their spare time

Answer 6

Avocation

Question 7

A business that continues to grow into a large company with unlimited growth and many workers eventually becoming a corporation

Answer 7

Venture Business

Question 8

A document that describes the steps that will be taken to open and operate a business

Answer 8

Business Plan

Question 9

Forms of pay other than salary or wages

Answer 9

Benefits

Question 10

Money available to spend or save after taxes have been paid

Answer 10

Disposable income

Question 11

A time when an employee who is not working will be paid

Answer 11

Pay without work

Question 12

Days when employees will be paid but not have to work

Answer 12

Paid holidays

Question 13

Examples of paid holidays are:

Answer 13

Thanksgiving Day
Christmas Day
Labor Day

Question 14

Paid time away from work due to illness

Answer 14

Sick leave

Question 15

Paid time away from work for personal reasons

Answer 15

Personal leave

Question 16

An account into which employees contribute a portion of their earnings for their retirement; employers may match these contribution

Answer 16

Retirement plan

Question 17

A benefit whereby employees may share in the profits of the business

Answer 17

Profit-sharing plan

Question 18

A benefit for workers that helps cover the cost of medically related expenses

Answer 18

Health insurance

Question 19

The price paid for health insurance

Answer 19

Premium

Question 20

Provides payment to replace income lost when illness or injury prevents the employee from working

Answer 20

Disability insurance

Question 21

An insurance plan that employers are required by law to provide for employee that pays medical and disability benefits to workers who are injured or contract diseases on the job.

Answer 21

Workers’ compensation

Question 22

A type of retirement plan that businesses offer employees to participate in.

Answer 22

401(k)

Question 23

Provides payments to retired workers

Answer 23

Pension plan

Question 24

When employees can avoid paying income tax on money in account until it is withdrawn.

Answer 24

Tax-deferred

Question 25

Working for a set amount of money, regardless of the amount of time worked.

Answer 25

Salary

Question 26

Benefits that provide emotional satisfaction or social status rather than money.

Answer 26

Perks

Question 27

How is being paid a salary different from being paid hourly wages?

Answer 27

Salaried workers get a pay per year or month regardless of how many extra hours they work. Often times with salaried workers you get paid vacation or sick days. With hourly workers you only get paid the hours you work. If you take days off you don’t get paid. Also you have the opportunity to make overtime at an hourly job.

Question 28

How is educational reimbursement a valuable benefit for employees?

Answer 28

It allows workers to get more education which gives them the potential to get better jobs. With better jobs usually come better pay. This benefits the worker.