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Explain the following consumer terms: (i) Net income (ii) Voluntary deductions - Junior Cycle Home Economics - Question 10 - 2007
Question 10
Explain the following consumer terms: (i) Net income (ii) Voluntary deductions
Worked Solution & Example Answer:Explain the following consumer terms: (i) Net income (ii) Voluntary deductions - Junior Cycle Home Economics - Question 10 - 2007
Step 1
Net income
Answer
Net income refers to the amount of money that an individual has available for spending or saving after all deductions have been made. This includes taxes, retirement contributions, and other withholdings. It is commonly known as 'take-home pay,' indicating the actual amount an employee receives in their paycheck.
Step 2
Voluntary deductions
Answer
Voluntary deductions are amounts that an individual elects to have withheld from their paycheck, separate from mandatory deductions like taxes. Examples include contributions to health insurance plans, pension schemes, savings plans, and union subscriptions. These deductions are typically set up by the individual according to their personal or financial preferences.