1. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved1 Introduction You are in for a really big surprise when you get your first real paycheck. You’ll be instantly introduced to the world of taxes and payroll deductions. ● You pay a lot of money to the different levels of government ● You take home a whole lot less money than you make A quick review of your pay stub will show you two important things:

2. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved2 Objectives Explain how a Pay-as-you-Earn system of collecting income taxes works You should be able to do the following after completing this lesson Review the two types of Payroll Deductions Identify the required Payroll Deductions Explain what a W-4 Form is and identify the information necessary to complete it List common voluntary Payroll Deductions Define Withholding and summarize how it works Define Payroll Deductions and discuss how they will affect you Define Take Home Pay and explain how it is calculated

3. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved3 5.4.1 – Pay-as-you-Earn What a Pay-as-you-Earn system of collecting income taxes is In this section, you will learn: Who is responsible for collecting the income taxes What they do with the income taxes they collect Pay-As-You-Earn Example What Withholding is and how it works You will run the following Interactive Example Why most people prefer to pay income taxes a little at a time

4. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved4 5.4.2 – Payroll Deductions What Payroll Deductions are In this section, you will learn: The 2 types of Payroll Deductions Which Payroll Deductions are required by law What Payroll Deductions are based on What is unique about voluntary Payroll Deductions How Payroll Deductions affect you

5. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved5 5.4.3 – Required Payroll Deductions Which taxes are considered required Payroll Deductions In this section, you will learn: How Taxable Pay is calculated What Tax Deductions do to your Taxable Pay How contributions to a 401(k) retirement plan are treated Why income taxes are based on your taxable pay Which taxes are based on your gross pay Which taxes are based on your taxable pay

6. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved6 5.4.4 – Determining How Much Tax to Withhold In this section, you will learn: What the purpose of a W-4 Form is When you will be required to complete a W-4 Form What allowances are and how they affect how much of your pay is deducted What information is required on a W-4 Form What can happen if you complete a W-4 incorrectly How an employer determines how much money to withhold each pay period

7. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved7 5.4.5 – Voluntary Payroll Deductions What voluntary payroll deductions are In this section, you will learn: Some common voluntary payroll deductions Which voluntary payroll deductions are based on gross pay How voluntary payroll deductions affect the amount of money you take home each pay period What you must do to have voluntary payroll deductions withheld from your pay Which voluntary payroll deductions are based on taxable pay

8. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved8 5.4.6 – Take Home Pay What Take Home pay is In this section, you will learn: How to calculate take home pay How to calculate required payroll deductions Payroll Deduction Comparison Exercise You will run the following Interactive Exercise How to calculate voluntary payroll deductions

9. Lesson 5.4 Payroll Deductions February 28, 2011Copyright © 2007-2011 … REMTECH, inc … All Rights Reserved9 Discussion Questions Why is the amount of money an individual is allowed to take home each pay period so much less than what they actually earn? Claiming more allowances on your W-4 means less money will be withheld from your pay. What happens if you claim 10 or 20 allowances on your W-4?