Which term means money taken from wages and paid to the government?

• A. Withholding tax
• B. Value
• C. Variance
• D. Wages

Answer: (A)

Money taken from wages and paid to the government is called withholding tax. This term describes the process where an employer deducts a portion of an employee’s earnings to cover income tax and then remits that money to the government on the employee’s behalf. It’s a prepayment of taxes based on income, rather than the total amount earned or a measure of how wages fluctuate.

The other terms don’t fit this idea: value is about worth, not a deduction; variance is a measure of spread in data; wages are the gross pay before any deductions. So withholding tax specifically captures the deduction that goes to tax authorities.