Fundamental Payroll Certification (FPC) Practice Exam

The requirement for withholdings for Federal, OASDI (Old Age, Survivors, and Disability Insurance), and Medicare taxes is specifically applicable to employees. This classification indicates a standard employer-employee relationship, where the employer is responsible for withholding these taxes from the employee's wages and remitting them to the government.

Employees typically receive benefits such as health insurance, retirement plans, and other protections under labor laws, which further distinguishes them from independent contractors and freelancers, who are considered self-employed. Independent contractors and freelancers manage their own tax payments, meaning they do not have these taxes withheld from their payments. Temporary workers may also follow the same withholding rules as employees as they often share the employment status. However, the key distinction rests with the employee classification, where the employer plays a direct role in tax withholding.