Transcript Paycheck Basics

Paycheck Basics
Look for a Job
 Using the Classified section of the
newspaper very few jobs a H.S. grad can qualify for
 many ads say “experience required” or
“experience preferred”
Income
 Often depends on your physical or mental
skills
Salary or Wage
 Wage- paid at a set rate per week for each
hour worked
 Extra hours (over 40 hours a week) may be
paid at a higher rate (overtime)
Salary or Wage
 Salary- set monthly rate of pay regardless
of the # of hours worked
 More authority over employees
 Greater control over when and how long you
work
 Do not receive overtime for extra hours
worked
Do hand-out
Gross wages vs. Net pay
 Gross wages-
Hand out sample pay stub
 100% of what you make
Net pay- amount of money you actually
take home in your paycheck (after all
payroll deductions are met)
Pay periodare you paid
once a
week, twice
a month…
Payroll Deductions
 Every company and employer offers
something different…you must do your
homework.
 vacation
 holidays
 sick time
 continuing education
Which job is better…
 $10.00 an hour
 No benefits
 $8.50 an hour
 Vacation time/sick leave/health insurance
p. 104- pick the better job
Payroll Deductions
 Federal Income tax
 The amount of income tax deduction depends
on:
 How much you earn
 Where you live
 Family status (married, # of dependents)
 W 4 form
Payroll Deductions
 State Income Tax
 Different in each state
 FL, NV, TX have no state income tax
 NJ taxes at around 11% (NY around 14%)
 State income tax is based on an estimate of how
much the person will owe in yearly taxes (W4)
Payroll Deductions
 Medicare Tax
 This is a federal deduction of 1.45% of your
wages
 Your employer also matches 1.45%
 So a total of 2.9% is contributed to this fund
 This plan provides hospital insurance to
retired (67 y.o.) or disabled people
Payroll Deductions
 Social Security Tax (FICA)
 Federal Retirement Plan
 7.5% of your wages
 Employer pays a matching 7.5%
 You may start receiving payments from this plan
starting at age 67
 The amount you receive each month is based on your
total contribution and your age at start date
FICA- Federal Insurance Contribution Act
Payroll Deductions
 Worker’s Compensation
 Deduction in your paycheck is based on how
dangerous your job is and the insurance costs
 Covers work related injuries suffered by
employees
Paycheck
Other Payroll Deductions
 Retirement Plan Contributions
 You can choose how much of your income to
contribute each month (non taxable)
 Sometimes the company will match a portion
of your contribution
Other Payroll Deductions
 Health, Dental and Life Insurance
 You may have to pay part of the cost for
yourself and/or your family
Other Withholdings
 Child support payments
 Savings bonds
Paycheck
 Quiz on reading a paycheck
W4
Determines the
amount of tax
taken out of each
paycheck. The
more exemptions
a person claims,
the less that will
be taken out of
the paycheck
each week.
 Watch 30 Days- “Minimum Wage”