Pay, benefits & working conditions
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Transcript Pay, benefits & working conditions
PAY, BENEFITS & WORKING
CONDITIONS
STARTING A NEW JOB
Union?
Sick Pay, Bereavement Leave, Holidays, Paid Vacation
Pension plan/Retirement
Insurance
Health
Dental
Vision
Life
Child Care Facilities?
Job sharing?
2 TYPES OF PAY
Hourly
Salary
GROSS PAY
Gross Pay – the total amount you earn before any deductions are subtracted.
Hourly Wages – regular hours worked times pay rate per hour
$10.00 x 40 hours = $400.00
Regular hours – used to be 8 continuous hours with scheduled breaks plus an
unpaid lunch period (8 am – 12 pm(noon); 1:00 pm – 5:00 pm)
Standard work week – used to be 40 hours in 5 –d ay period
Overtime – time worked beyond regular hours
Overtime pay rate – usually 1 ½ regular pay rate, not always
$10.00 x 1.5 = $15.00
GROSS PAY CONT.
45 hours worked (using standard work hours/week, $10.00/hour and 1 ½ for
overtime pay)
40 x $10.00 = $400.00
5 x $15.00 = $75.00
Gross pay = $475.00
Gross pay indicated on pay stub
YTD on pay stub = year – to – date
SALARY
Salaried employee - Works for a salary and not an hourly wage
NO Overtime (OT)
Usually stated as an annual (yearly) amount
Employer divides annual salary into equal amounts to be paid each pay period
$50,000/year paid every 2 weeks
52 weeks in a year/2 weeks per pay period – 26 pay periods
$50,000/26 pay periods = $1,923.08 (gross pay)
DEDUCTIONS
Deductions – Amounts subtracted from your gross pay
Mandatory – required by law
Social Security/Medicare taxes
Federal income tax
State income tax – some states
Voluntary
Health, Dental, Vision, Life Insurance
Retirement
Health Savings Plan
Deductions also listed on pay stub for current pay period & YTD
SOCIAL SECURITY/MEDICARE
FICA – Federal Insurance Contributions Act – (Social Security & Medicare)
OASDI – Old Age, Survivors, Disability Insurance (Social Security)
6.2% of gross pay
Employee and Employer pays
Maximum taxable earning $117,000
$475 gross * 6.2% = $29.45
Medicare (Hospital Insurance)
1.45% of gross pay
Employee and Employer pays
$475 gross * 1.45% = $6.89
FEDERAL INCOME TAX
W4 Form – Employee’s Withholding Allowance Certificate
http://www.irs.gov/pub/irs-pdf/fw4.pdf
Tax withholding tables - - http://www.irs.gov/pub/irs-pdf/p15.pdf (pg 47)
Pay period
Marital status
Number of Withholding Allowances
Examples
$475 gross; paid weekly; single, claiming 1
Single vs. Married
Married with more allowances
NET PAY
Net Pay – when all deductions are taken out of gross pay
Net Pay calculation – Gross Pay Minus Total Deductions (amount of your
paycheck)
AKA “take-home pay”
Gross
$475.00
Deductions
OAISD
Medicare
Fed. Inc. Tax
$29.45
6.89
45.00
Total Deductions
81.34
Net Pay
$393.66
SELF-EMPLOYED REQUIREMENTS
Federal Income Tax – file estimated tax returns quarterly (4xs per yr.) with
payments
Must also pay Social Security and Medicare taxes
Must pay both employee and matching employer contributions to social security and
Medicare
Social Security – 12.4% of gross income
Medicare – 2.9% of gross income
Self-employment tax – total Social Security and Medicare tax paid by self-employeed
individuals (12.4 + 2.9 = 15.3%)
BENEFITS AND INCENTIVES
Benefits – Forms of employee compensation in addition to pay
Should be taken into account (evaluated) when considering a new job
Profit Sharing
Paid Vacations & Holidays
Child Care
Sick Pay
Leaves of Absence
Insurance
Bonuses & Stock Options
Pension & Savings Plans
Travel Expenses
PROFIT SHARING
Profit sharing – plan that allows employees to receive a portion of the company’s
profits at the end of the corporate year
Incentive pay – money offered to encourage employees to strive for higher levels
of performance
Links employee compensation with company profit goals, giving employees
incentive to work harder and reduce waste
PAID VACATION AND HOLIDAYS
Paid vacation – as it sounds – employee gets paid while on vacation
Common setup: 1 week after 1 year; 2 weeks after 2 years; 3 weeks after 5 years
Paid holidays – paid time off for holidays
Christmas *
Thanksgiving
Fourth of July
Labor Day **
Memorial Day **
Sometimes employees required to work a holiday are paid double or more than double
regular pay rate
*Religious
**Depends type of business – agriculture related, manufacturing
CHILD CARE, SICK PAY, LEAVES OF
ABSENCE
Some companies provide on-site child-care facilities or even coverage of childcare expenses
Sick pay – allowance of days each year for illness of employee or immediate
family member
Leaves of absence – Temporary leave without pay
Maternity/Paternity
Education/Degree/Training
INSURANCE
Health insurance – many employers provide group health insurance plans
Some employers pay for all of the employee’s plan
Most employers – employee pays for part of their own coverage and dependents
(spouse/children)
Deductible – employee paid amount of the bill
After deductible is met – a percentage of doctor bills/prescriptions/hospitalization is
paid
Choose your deductible plan – lower the deductible – higher the rate for that plan
Life insurance – cash benefit paid to designated person (beneficiary) when insured
person dies.
Purpose – partially offset the income lost when wage earner dies
INSURANCE CONTINUED
Dental Insurance – maximum benefit per year/per family member
Orthodontia (braces) may not be covered
Routine services – covered 80-100% (exams, cleanings, fillings)
Major services – often covered 50% (root canals, bridges, crowns)
Vision Insurance – cover part or all of eye exams, prescription lenses/contacts –
maximum benefit per year/per family member
BONUSES AND STOCK OPTIONS
Bonuses – incentive pay based on quality of work done, years of service, or sales &
profits
$100 year-end as reward for no serious on – the – job accidents
Holiday bonus based on years of service
Sales goal met – top-level managers receive bonus equal to percentage of current
salaries
Stock-purchase options – gives employees (usually executives) the right to buy a
set number of shares of the company’s stock at a fixed price by a certain time
Employees gain as long as stock price goes up
Many types of plans
PENSION AND SAVINGS PLANS
Pension plans for retirement
Funded by employer **
After retirement – employee receives a monthly check
Might be able to withdraw some funds early
Might be able to retire early if take reduced payments
Vested – when employee is entitled to full retirement account after a specific period of
time
Employer-sponsored savings plans (401K/401B) – also retirement plans
Employees contribute – employer might contribute
Early withdrawals – financial penalty – unless (sometimes) for education, first-time
home purchase, medical expenses
TRAVEL EXPENSES
Jobs requiring travel - companies provide vehicle or mileage allowance if own car
is used
Federal government – POV reimbursement http://www.gsa.gov/portal/content/100715
While out of town – daily allowance or motel, meals & other expenses paid
Federal government per-diem: http://www.gsa.gov/portal/category/100120
Some cases – employee pays expenses and is reimbursed later
EVALUATING EMPLOYEE BENEFITS
Benefits add great value to employee’s position
Many not taxable (except bonuses & others paid in cash) – provide valueable
coverage and advantages
Large companies usually have more optional benefits
WORK ARRANGEMENTS
Altered workweeks
Job rotation
Job sharing
Telecommuting
ALTERED WORKWEEKS
Flextime – allow employees to choose their working hours within defined limits
Usually employees required to be present during specified core time period
Remaining hours can be chosen from around core time
Allows to begin very early, or come later and stay later
Benefits of flexibility – dropping off/picking up school children, medical & other
appointments
Compressed workweek – compressing 40-hours into less than 5 days
4 – 10 hour day (often followed by 3 days off)
JOB ROTATION
Job rotation – employees trained to do more than one specialized task then rotate
from one task to antoher
Variety – reduces boredom & burnout
Cross training so if someone is absent, another knows the job – keep work flowing
JOB SHARING
Job sharing – two people share one full-time position
Split salary and benfits
Nice for people who want to work part-time
TELECOMMUTING
Telecommunity – work at home or on the road and stay in contact with manager
and co-workers through e-mail, text, fax, cell phone calls, etc
Advances in technology making this more common
Often associated with computer related work – data entry, Web design, software
development