An employer's total payroll-related costs always exceed the wages and salaries earned by employees by:
A) Amounts withheld from employees' pay.
B) Payroll taxes and mandated programs such as workers' compensation insurance.
C) 50%.
D) None of the above. Employers' payroll-related costs actually are less than the gross wages and salaries earned by employees, because of amounts withheld from employees' checks.

Question

Quizplus · Accepted Answer

Payroll-related costs include not only wages and salaries, but also payroll taxes and mandated programs such as workers' compensation insurance. These costs are in addition to the wages and salaries earned by employees, thus they exceed the amount of gross pay. Option A is only part of the answer, as amounts withheld from employees' pay are included in the total payroll-related costs but are not the only factor. Option C is incorrect, as 50% is not necessarily the amount by which payroll-related costs exceed gross wages and salaries. Option D is incorrect, as employers' payroll-related costs are always greater than the gross wages and salaries earned by employees.

An Employer's Total Payroll-Related Costs Always Exceed the Wages and Salaries