16
QuizMultiple Choice

Tax Basics

Question 16 • Financial Math - MA2007

Social Security and Personal Income tax are called Payroll taxes because _____.

Answer
A
they help to balance the national payroll budget.
B
they are automatically deducted from payroll.
C
once paid, they are used to supplement the paychecks of people in need.
D
you need to prove you have paid them before you can pick up your paycheck.

Explanation

Social Security and personal income taxes are called payroll taxes because they are typically withheld directly from an employee’s paycheck by the employer. This matches choice B, “they are automatically deducted from payroll.” They are not called payroll taxes because they balance a national payroll budget or must be paid before a worker can collect a paycheck.

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