Transcript Examining Pay and Benefits!!!

Examining Pay
and Benefits!!!
Section 8.1
Types of Pay

Salary—A set amount of money earned by an
employee per year or other fixed length of
time.( Each paycheck reflects the total salary
for the year divided by the number of pay
periods in the year.)

Wages—a set amount of money that an
employee earns per hour of work. (Your
paycheck is computed by multiplying the pay
per hour by the number of hours you work.)

Piecework—Similar to wages, but you are paid based on
the number of items or pieces produced.

Commission—A fixed percentage or amount of
profit that an employee earns for a sale
completion.
Types of Pay Cont…

Bonus—a sum of money paid to an
employee in addition to regular wages
or salary. (You usually need to have
met certain goals.)

Tips—this is given to an employee by
a customer in exchange for a service.
Regulating Affecting
Pay

Fair Labor Standards Act (FLSA)
guarantees equal pay for the same job.
The rules apply to people working at the
same job at the same level.

Minimum wage is set by the state,
setting the minimum amount an
employer may pay an employee per hour.

Overtime—Most jobs pay per hour are
based on a 40 hour week . Any hours
worked over 40 hours per week is
considered overtime, and is paid at least
1 ½ times the regular rate of pay.
Regulations Affecting
Pay

Overtime—The FLSA states jobs
paying hourly wages must
compensate their employees with
overtime pay.
Types of Benefits

Insurance Benefits—paid health
plans are often offered by companies.
(this is much less costly than buying
personal insurance.)

Savings and Retirement benefits

Other Benefits.—paid holidays,
vacation, and sick leaves.
Employment
Classifications

Full-time—At least 35 hours a week

Part-time—Fewer then 35 hours a
week

Temporary—workers that are hired to
fill temporary vacancies or to help
with temporary work.


The worker is hired by an angency and the
agency is hired by the employer
Contract
Thought of the Day-Wr i t e a b ri e f re sp o n se t o t h e q u e st ion b e l ow.
*The running of the government and the
many programs it provides are all
thanks to the American people and
the taxes they pay. How do you feel
about the way that the government is
using your tax dollars, today?
Understanding
Your Paycheck
Section 8.2
How Employees are
Paid

Weekly

Bi-Weekly

Once a month

Twice a month

Direct Deposit—Pay is electronically
transferred directly into the recipient's
bank account. Still receive a pay stub as a
receipt showing all pertinent information,
however it cannot be cashed or deposited.
Information on your
pay stub

Your Identification

Name

Address

Social Security number and Employee
number may be included.
Earnings

Your earnings

Number of hours worked during the current
pay period.

Salaried employees may reflect the number
of regular working hours in the pay period or
may be left blank.

Gross Pay—The total amount of money
earned for working during the pay period.

Total earned so far this year.

Your Deductions

Your Net Pay
Deductions
 Tax
Withholdings

Federal Income Tax: Taxes taken out of a
paycheck that go to the federal government.
The bulk of this money is used to fund the
military and education programs.

Social Security: Withholdings that go into
the federal government program that
provides income support to people who are
unemployed, disabled, or over the age of 65.

Medicare: Withholdings that go into the
federal health insurance program for people
65 and older, and also for people with
disabilities.
Deductions

Anything that is subtracted from
gross pay.

Tax withholdings—Taxes taken out of
your pay

Income tax(state and local)

Federal tax (Social Security (FICA)
Deductions

Benefits-(Contributions to employee
programs)

Insurance (Medical, dental and vision
care)

Saving or retirement plans (ie: pension,
401K)
Net pay-The amount of pay an
employee is left with after taxes and
other deductions are subtracted from
the gross pay. Also know as “takehome pay”.
Deductions cont…

State Income Tax: Taxes taken out of a
paycheck that go to the state
government. These taxes are used for
schools, roads, police and other state
funded programs.

City/Local Income Tax: Taxes taken out
of a paycheck that go to the city/local
government. Not everyone pays city or
local taxes; it depends on where you live
and work.
Another Look at Taxes!
*TAX FREE DAY—this idea represents
how long Americans work to pay their
federal, state and city income taxes
each year.
*The latest tax free date in history was
May 3, 2000
Tax Free Dates for
2009

National Average was April 13

Alaska had the earliest date on March 23 rd

Connecticut had the latest date, April 30 th

Illinois fell directly in line with the
national average with a Tax free date of
April 13 th .
Yet Another Look at
Taxes!!!
Deductions cont…

Benefits

Life insurance

Accident Insurance

Health Insurance

Retirement
Paying Income Taxes

Section 8.3
Your income tax
responsibilities…

Complete a form that allows your
employer to withhold income taxes
from your pay.

File a tax return at least once a year,
and pay additional taxes owed.
Income Tax
Withholding

Form W-4

Personal information

Exemptions status

Allowances—these are factors affecting
the amount of income tax withholdings.
The more allowances you claim, the less
tax your employer with take out.
Getting ready for tax
time…

April 15 each year your taxes must
be submitted, if not the IRS can
charge you penalty and interest on
the outstanding amount you owe.
Do you need to file..

All employed people need to file with
few exceptions as follows based on
earnings:

Some self-employed

Some over the age of 65

Some single adults

When in doubt file or call the IRS help
line for verification.
What you need to file
your taxes…

Form W-2—this is an earning
statement that is required to be
produced for you by Jan. 31 of each
year by your employer.

Form 1099—This is the earning
statement that you will receive for
each bank and money market account
that you have that earns interest.

IRS instruction booklet and form

Personal Records
Terms used for filing…

Filing status—this is basically asking
if you are married or single.

Exemptions—this question is to
obtain the number of people that you
support. Exemptions can included
yourself, spouse, children or other
relatives that depend on you support.

Income—This must include all money
made through any source throughout
the year.
Terms used for filing…

Deductions—this reduces the amount
of income that is taxed. This can
included things like money given to
charity, or interest on a home loan.

Itemized deduction—list each separately

Standardized—this is a set amount that
the IRS allows with out listing actual
expenses.
Terms used for filing…

Taxable income—You can subtract an
additional amount from your income
based on the number of exemptions
you claim, the left over is your
taxable income.

Tax owed—this is the amount you
must pay the US government.

Tax Credit—this is subtracted
directly from the amount of taxes
owed. This includes things like
paying for college tuition and child
care expenses.
Benefits
of
Planning
Electronic
Filing