Fundamental Payroll Certification (FPC) Practice Exam 2025 – Comprehensive All-in-One Guide to Exam Success!

Question: 1 / 400

Which components are typically excluded from gross wages?

Health insurance premiums deducted from pay

Health insurance premiums deducted from pay are considered exclusions from gross wages because they are amounts taken out of an employee's paycheck before arriving at the net pay. Gross wages reflect the total earnings of an employee without any deductions, encompassing base salary, overtime pay, and any bonuses. Once the premiums for health insurance are deducted, the resulting figure represents the net wage that the employee receives, illustrating how certain deductions—such as those for health insurance—are not part of the gross wage calculation.

In contrast, base salary, overtime pay, and bonuses are all components of gross wages, representing the total compensation earned before any deductions are applied. Recognizing the difference between gross wages and deductions is crucial for accurate payroll processing and financial reporting.

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Base salary before deductions

Overtime pay included in the paycheck

Bonuses awarded throughout the year

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