General Education Development (GED) Practice Exam

Which deductions apply to full-time employees based on Scott Smith's payroll?

1. 401k and health insurance

2. Social security and Medicare

3. Social security, Medicare, and income taxes

4. None of the above

The correct answer is: Social security, Medicare, and income taxes

Full-time employees typically have deductions subtracted from their paychecks in accordance with federal regulations and company policies. Income taxes, Social Security, and Medicare deductions are commonly withheld from the paychecks of employees to fund various social programs and to ensure compliance with tax obligations. Social Security taxes help fund the Social Security program, which provides benefits for retirees and individuals with disabilities. The Medicare tax helps fund the Medicare program, which provides health care for the elderly and certain disabled individuals. Income taxes, which go to the federal government and potentially state and local governments as well, are calculated based on the employee's earnings. Therefore, choosing this answer is accurate because it encompasses the necessary and typical deductions that apply to full-time employees based on payroll practices and legal requirements. While other options may include valid deductions as well, they do not encompass the full array of mandatory deductions that a full-time employee would encounter. For instance, 401k and health insurance contributions are often voluntary and can vary significantly between employers, making them less universally applicable than Social Security, Medicare, and income taxes.