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Understanding your Pay Check

Understanding your Pay Check. = = = "Understanding Your Paycheck" = = = WOODEN NICKEL.

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Understanding your Pay Check

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  1. Understanding your Pay Check

  2. = = = "Understanding Your Paycheck" = = = WOODEN NICKEL • Gross pay: $1,222.02Deductions: ----------- Income Tax: 244.40 Outgo Tax: 45.21 State Tax: 61.10 Interstate Tax: 5.89 County Tax: 6.11 City Tax: 12.22 Rural Tax: 4.44 Back Tax: 1.11 Front Tax: 1.16 Side Tax: 1.61 Up Tax: 2.22 Down Tax: 1.11 Tic-Tacs: 1.98 Thumbtacks: 3.93 Carpet Tacks: 0.98 Stadium Tax: 0.69 Flat Tax: 8.32 Surtax: 3.46 Ma'am Tax: 2.60 Parking Fee: 5.00 No Parking Fee: 10.00 F.I.C.A.: 81.88 T.G.I.F.: 9.95 Life Insurance: 5.85 Health Insurance: 16.23 Disability: 2.50 Ability: .25 Liability Insurance: 3.41 Dental Insurance: 4.50 Mental Insurance: 4.33 Reassurance: 0.11 Coffee: 6.85 Coffee Cups: 66.51 Calendar: 3.06 Floor Rental: 16.85 Chair Rental: 4.32 Desk Rental: 4.43 Union Dues: 5.85 Union Dont's: 3.77 Cash Advances: 0.69 Cash Retreats: 121.35 Overtime: 1.26 Undertime: 54.83 Eastern Time: 9.00 Central Time: 8.00 Mountain Time: 7.00 Pacific Time: 6.00 Grenwich Mean Time: 24.00 Bathroom Time: 6.05 Time Out: 12.21 Oxygen: 10.02 Water: 16.54 Electricity: 38.23 Heat: 51.42 Misc.: 144.38 Air Conditioning: 46.83 --------- Total, all Deductions $1,222.00Take Home Pay: $0,000.02

  3. http://www.connectionsforsuccess.com/quiz/slideshow.asp?quiz_id=166Instructions:Click on the correct choice. Click 'Next' for another question. Paychecks Pre-Test True or False • Your gross pay will always be larger than your net pay. • It is possible for my net pay to be more than your gross pay. • When an employer offers you benefits, it can save you $. • Employers will take out federal, state, and city taxes from your paycheck. • Legally, you can choose not to pay taxes. • Social Security Taxes = FICA • A pay stub and a paycheck are the same thing. • A pay period can be weekly, bimonthly, or monthly. • Deductions on your paycheck are for sick pay and vacations. • Taxes are a deduction for only some employees.

  4. http://www.floridatechnet.org/inservice/fw/mod9tw2.pdf For many people, the day they get their first paycheck at a new job is a time for celebration! But remember, new employees do not always get a paycheck on the first payday after they start work. It may take longer for the paperwork to go through. Many offices will give you a schedule of the dates your receive your pay. Most people get paid once a week, once every two weeks, or once a month. Your paycheck usually includes two parts. The first part is the actual check you take to the bank or cash. The check is usually your net pay or take-home pay.

  5. When you get your first paycheck, be sure to check it over to make sure you understand each item that has been deducted. Take your paycheck to your supervisor or payroll right away if there is a problem, so they can get it straightened out.

  6. When you receive your first paycheck, it is an exciting experience. You worked a forty-hour week at ten dollars an hour, so you are expecting a $400 paycheck, right? Not exactly. It is true that a paycheck shows how many hours worked and the wage that you should receive, but it also shows what taxes you pay and any other items that you pay for through your paycheck. This section will cover some of the most important information that you will find on your paycheck and/or pay stub.

  7. Money Vocabulary • A paycheck is a check issued to an employee as payment for salary or wages. It is the paper that you use to cash your check or deposit it in the bank. • A pay stub is a printed statement of the amount an employee is paid, showing deductions for tax, social security, and insurance. Pay stubs are an excellent way to keep track of how much money you earn, to track how many hours you work, and to record what is taken out of your paycheck. Employees who have their paychecks sent directly to their bank (called direct deposit) use their pay stubs as a receipt that they have been paid by their employer.

  8. When do I get paid, and how much? • Employees receive paychecks every pay period. • Most of the time the employer determines the pay period. It may be daily, weekly, or monthly. Sometimes an employee can choose when they receive their paychecks. • Your paycheck should list the amount of money earned for the current pay period and the total amount of money earned in a calendar year (January to December), called the year to date earnings. You need to understand the difference between gross pay and net pay to find out how much money is earned on a paycheck.

  9. More Vocabulary • Gross Income: Your gross income is your total pay before anything is taken out. It includes any overtime, paid vocation time, or paid sick time you have earned. • Net Income: Your net income is the amount you are paid after deductions. This is your take-home pay. • Income to Date: Most paycheck studs will add up how much you have made so far during the calendar year. • Pay Rate: Your pay rate includes the amount you are paid. It is usually listed here by the hour.

  10. Just more Vocabulary • Deductions: All the additional money taken out of your paycheck will be listed as deductions. These include the benefits and deductions described in Teamwork 2, such as federal tax, FICA, health insurance, retirement, and other deductions. http://www.runet.edu/~pers-web/forms/paystub.pdf • Pay period: The pay period usually list the beginning and ending dates of the period for which you are being paid. You should check this carefully to make sure you are being paid for all the time you have worked.

  11. Karen’s storyKaren’s First Paycheck

  12. Deductions, Reductions, and taxes • In tax law, a deduction is an amount that you can subtract from the total amount on which you owe tax. An example would be wages deducted for child support. • A reduction is an amount that you can subtract from your paycheck before without it being taxed, like health care. • Taxation is used by the government and the state to raise money. This money, or revenue, is used many times to pay for services for the public that may not be paid for entirely by an individual alone. A good example of this would be health care and welfare services.

  13. Benefits • Benefits are payments (other than a paycheck) or other benefits (health insurance) given to employees by employers. Benefits may be required by law, offered by an employer, or requested by employees as a group through collective bargaining. The following are examples of employee benefits. • Paid holidays *Paid vacations • Paid personal leave *Paid funeral leave • Paid military leave *Paid jury-duty leave • Paid and unpaid family leave *Paid sick leave • Short term disability insurance * Medical care • Long-term disability insurance *Dental care • Defined benefit pension plans *Life insurance • Defined contribution plans * Vision care • Flexible benefit plans *Travel pay • Reimbursement accounts *Child care • Wellness programs *Educational assistance • Ride-share programs

  14. http://www.irs.gov/pub/irs-fill/fw4_03.pdf Withholding Income Tax From Your Paycheck The amount of income tax your employer withholds from your regular pay depends on two things: The amount you earn The information you give your employer on Form W-4 (and DE 4, if desired). Form W-4 includes three types of information that your employer will use to figure your withholding. Whether to withhold at the single rate or married rate. How many withholding allowances you claim (each allowance reduces the amount withheld). Whether you want an additional amount withheld. If your income is low enough that you will not have to pay income tax for the year, you may be exempt from withholding. See ‘Resources’ below for more information. NEW Job When you start a new job, you must fill out Form W-4 (and DE 4, if desired) and give it to your employer. Your employer should have the forms. If you later need to change the information you gave, you must fill out a new form. W-4 Forms

  15. What are Social Security taxes? • Take a look at your pay stub—the part that shows how much is taken out for the various taxes and benefits each pay period. One of those deductions is for Social Security and Medicare taxes. On some pay stubs it's called FICA, which stands for “Federal Insurance Contributions Act,” the law that authorized payroll deductions for Social Security. • Social Security is part of almost everyone's life. Social Security protects more than 150 million workers and pays benefits to more than 45 million people.

  16. Here's what you and your employer are buying with your Social Security taxes: • Retirement coverage—benefits paid monthly to eligible retired workers as early as age 62; • Disability coverage—benefits paid monthly to eligible workers, all ages who have a severe disability; • Family coverage—benefits paid monthly to the spouses and children (including dependent adults who have been disabled since childhood) of eligible retired and disabled workers; • Survivors coverage—benefits paid monthly to the eligible widow/widower and children of a deceased worker; and • Medicare benefits—help with hospital bills, as well as limited coverage of skilled nursing facility stays

  17. Where Your Social Security Taxes Go • Out of every dollar that workers and their employers pay in Social Security taxes: • 85 cents goes to a trust fund that pays for monthly benefits to retirees and their families and to widow, widowers and children of workers who have died; and • 15 cents goes to a trust fund that pays benefits to people with disabilities and their families. • Your Social Security taxes also pay for administering Social Security. How Social Security works is based on a simple process. While you work, you pay taxes into Social Security and when you retire or become disabled, you (and your family members) collect monthly benefits from Social Security. Or when you die, your family may collect survivors benefits.

  18. Federal Income Tax-Federal Income Tax (FIT) An employer is required to withhold a specified amount or percentage from each payment of wages to each employee to collect currently the approximate federal income tax liability owed on those wages. The number of withholding exemptions claimed by the employee is taken into account in calculating the amount withheld

  19. State Taxes • State taxes are used to fund programs that help the state and its residents. State highways and transportation projects, like the new system of bridges going up across the river, receive tax dollars. Universities and schools also get funding from the state, along with the state law enforcement system, including state courts, prisons, and police. The state pays for welfare and special services programs. We also fund state parks and recreation, and oversee professional license programs, given to such groups as drivers, doctors, lawyers, and barbers, to make sure they maintain proper standards of conduct and safety.

  20. Vocabulary Quiz Gross Pay Earnings Benefits Net Pay Deductions Rate Federal income tax FICA / Medicare The amount of money that you have left to take home on your paycheck after all the deductions are removed. Money paid from your paycheck to the US government. Money taken from your paycheck, paid to the government, then sent as a monthly check to senior citizens. The money that you make, or earn, at work. Your hourly pay or wage. The total amount of money you made during a pay period. Extra that the company pays besides what you earn at work, like sick pay, health insurance, paid vacation days, a retirement plan, etc. Money taken from your paycheck for health insurance, city, state, and federal taxes, disability insurance, and anything else.

  21. How many hours did you work this pay period? What was your regular pay? Overtime pay? What was the amount of your gross earnings? How much was withheld for federal income tax? State income tax? How much was deducted for social security? What was the amount withheld for insurance? What were the total deductions for this pay period? What percent of your gross pay was withheld? If you work the same number of hours for the next 3 weeks, what will be your total net pay for the month? Why is it important to check your pay statement and keep it for your records?

  22. YOUR FIRST PAYCHECK HAS FINALLY ARRIVED! DECISIONS..DECISIONS..DECISIONS... • http://www.macomb.k12.mi.us/wq/cg2ucs.htm • Web quest

  23. Resources: • http://www.macomb.k12.mi.us/wq/cg2ucs.htm • http://www.connectionsforsuccess.com/quiz/match.asp?quiz_id=172 • http://www.runet.edu/~persweb/forms/paystub.pdf • http://www.lake.k12.fl.us/stw/Lesson%20Plans/paycheck.html • http://www.tax.ca.gov/paycheckind.html#Top

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