Future Business Leaders of America (FBLA) Accounting Practice Test

What is typically included in an employee’s payroll?

1. Only base salary

2. Gross earnings, deductions, and net pay

3. Only commissions and bonuses

4. Income from other business ventures

The correct answer is: Gross earnings, deductions, and net pay

An employee’s payroll typically includes gross earnings, deductions, and net pay. Gross earnings encompass all forms of compensation before any deductions, which include base salary, commissions, and bonuses. Deductions may cover taxes, retirement contributions, health insurance, and other benefits. After accounting for these deductions, net pay represents the actual amount the employee receives in their paycheck. This comprehensive understanding ensures that payroll reflects the complete picture of an employee's compensation package and the various amounts that affect their take-home pay. The other options do not capture the full scope of payroll. Focusing solely on base salary or only commissions and bonuses ignores the impact of deductions and thus misrepresents what an employee ultimately receives. Income from other business ventures is unrelated to an employee's payroll in terms of their primary employment and would not typically be included in official payroll calculations. This understanding of payroll elements is crucial for both employees and employers in managing compensation accurately.