Wage gap after college

1. Wage gap after college • http://lifeinc.today.com/_news/2012/10/23/14649785-wage-gap-starts-right-after-college-research-shows?lite

2. Chapter 8 Income and Taxes • Objectives: • Types of income • Regulations affecting pay • Examples of benefits • Employment classifications and effect on pay

3. In 2009, 38% of wives out-earned their husbands. • http://www.mnn.com/money/personal-finance/blogs/more-women-are-earning-more-than-their-husbands Of women with children: 36% felt their higher earnings had a negative effect on their marriage

4. 8.1 Types of Pay • Earned Income: money received for doing your job. • Salary: Set amount of money paid for certain period of time. ex: $45,000 a year *highly skilled, supervisory positions, which involve more responsibility • Wages: Set amount for every hour of work. ex: $10/hour • *up to 40 hours a week same hourly rate. Time over 40 hours qualify for overtime 1.5 x hourly rate. Beginner or unskilled workers make Minimum wage. Highly skilled, experienced workers have higher wages.

5. 8.1 con’t • Commissionpercentage of sales made, ex: 10% of sales • Encourage employees to sell more—real estate agents, insurance agents, retail sales. Some may receive a base salary + commission. • Piecework: paid fixed amount for reach piece of work completed ex: $12.00 per basket. (Must be paid no less than minimum wage if qualifies.) • Tips: ex:15%-20% of bill for good service • Bonus: extra pay in addition to wage/salary. • Incentives, and End of Year bonus, Sign on Bonus. • Fringe Benefits: extra financial rewards.

6. Tips and Bonuses • Do you owe taxes on tips and bonuses?

7. Tips and Bonuses • Do you pay taxes on tips and bonuses? • Yes. • Tipped employees earn $4.95/hr wage. Report tips for tax purposes.

8. Bonuses: • Bonus amounts typically depend on • company profits • your length of time with the company. • May vary from year to year. • Ex: Cash or Jelly of the Month club.

9. Fair Labor Standards Act • Same work, same pay. • Prevent discrimination • Fair hourly wages • Minimum wage IL $8.25 • Sub-minimum wage : • IL Employers may pay anyone under the age of 18 50¢ less. • http://www.illinois.gov/idol/Laws-Rules/FLS/Pages/minimum-wage-law.aspx

10. Overtime • Over 40 hours/week • 1.5 x hourly rate • Salaried employees excluded.

11. Fringe benefits important to consider when deciding which job to accept. • Health, dental, vision, life insurance plans • Savings/retirement plans • Paid holidays • Sick leave, bereavement (relatives funerals) • Tuition reimbursement • Company car • Discounts • Gym memberships, daycare, etc. • Ex: Wesclin teachers • 13 sick days/year (accumulate for service years) • 3 personal days ( if unused paid for) • Tuition reimbursement--$100/credit hour

12. Employment classifications • Full-time: 35+ hours/week • Qualify for other company benefits. • Part-time: under 35 hrs/wk. Most do not qualify for benefits. • BLS-Of the nearly 1,000,000 jobs the economy has created since the first of the year, only 222,000 of them were full-time. Put another way, three out of four jobs created since January 1,2013 have been part-time. • Temps: Short term assignments. No benefits. • Hired through temp agency, cheaper for employers. • Contract: Hired for specific period to complete project. No company benefits.

13. Computer lab • Make your paystub;)

14. Complete the Cupcake company worksheet.

15. 8.2 Understanding paychecks • How would you like to get paid? • Weekly • Bi-weekly (2 weeks) • Monthly • Direct Deposit- check goes directly into your specified bank account. *receive money faster. No trip to bank.

16. What’s on a pay stub? • Employee identification • Pay period • Earnings: hours x rate of pay • YTD= year to date • T/P= this pay period

17. How did your Net Pay compare to your Gross Pay? • How much was taken out? • Divide “current deductions” by “current amount” what % is it? How long are you working in order to just pay your deductions?? Take annual salary x % of deductions. How long does it take you to make that amount of money?

18. Who is “FICA”?! • Social Security (FICA): Pays retirement, survivors, disability benefits. • Medicare (FICA): Helps pay medical expenses for those that qualify- “Federal Insurance Contributions Act”

19. Other Taxes: • Federal & State Taxes: Help pay for schools, roads, Parks, Law enforcement, etc.

20. Should you pay higher tax rates if you make more $? • http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html • 2013 Official Tax Brackets

21. Is being “Paid under the Table”a good idea?

22. Concerns of “Paid under the table” • not offering you any of the benefits to which you might be entitled, • you’re probably not covered for purposes of worker’s compensation or unemployment. • You’re definitely not paying in to Social Security. • No Proof of income- difficult to get loans, credit with no pay stubs.

23. What President started income taxes? Why?

24. What President started income taxes? Why? • To help fund the Civil War, 1863. Taxed on annual income Over $800.

25. Ruled Income TaxUnconstitutional • 1913 Woodrow Wilson’s term, 16th Amendment allowed Gov’t to collect income taxes. 1930’s FDR increased taxes to help pay for SOCIAL SECURITY.

27. references • http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages • NEFE high school financial plan

28. Where does all my money go?? • Gross Pay: total amount of money earned. • Net Pay: (take home pay) Amount of pay AFTER taxes and other deductions are taken out.