Taxes & Paychecks finschool by 5paisa
Ritika, a Business Analyst, got her first paycheck but it was way less than what she expected.
She did not understand what the deduction was about. So she turned to her friend, Anil to clear out her doubts.
Anil explained that the deductions were just withholdings. "Withholdings is the portion of your paycheque that your employer withholds for the government."
It is paid in this way so that we do not end up owing it at tax time..
The amount she earned pre-tax was her Gross-Pay. "Gross salary is the monthly or yearly salary of an individual before any deductions are made from it."
" Net Pay is the income that an employee actually takes home after tax, provident fund and other such deductions are subtracted from it."
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