Question

which of the following would affect an employees net pay?
a opting out of their employers dental insurance plan and putting the money saved into their employers health insurance plan
b claiming a different number of dependents and thereby reducing their income tax withholdings
c getting a raise and putting the extra money into a 401(k) plan
d receiving a bonus in the form of extra vacation days

please select the best answer from the choices provided
a
b
d

Explanation:

• Option A: Shifting funds between employer-sponsored insurance plans changes pre-tax deductions but the total pre-tax amount allocated to insurance stays the same, so net pay is unaffected.
• Option B: Changing the number of dependents alters income tax withholdings. Lower withholdings mean less tax taken out of gross pay, which directly increases net pay.
• Option C: Putting a raise into a 401(k) (a pre-tax retirement account) means the extra income is deducted before taxes, so net pay does not change from the raise.
• Option D: Extra vacation days as a bonus do not involve monetary pay, so they have no impact on net pay.

Answer:

b. Claiming a different number of dependents and thereby reducing their income tax withholdings