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FL Chapter 2 Study Guide KEY…

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1 FL Chapter 2 Study Guide KEY…
Two types of employees: Hourly Salaried Lowest rate of pay: Minimum Wage Overtime is 1.5 times regular pay for over 40 hours What type of employee does not keep time cards?

2 5. List required payroll deductions
Federal income tax state income tax (most states but not all) social security tax medicare tax 6. optional (voluntary) payroll deductions retirement (401K, 403B, pension) disability insurance medical insurance contribution union dues life insurance

3 7. Forms of payment other than wages or salary: BENEFITS 8
7. Forms of payment other than wages or salary: BENEFITS 8. Benefits for full-time workers: Pay without work (vacations, holidays, sick pay) Education reimbursement Perks Retirement plans (company matching) Stock option plans Medical/Dental Insurance Pay without work refers to times when an employee who is not working will still be paid. Examples: Paid vacations, holidays and sick days K is a Retirement plan. - NOT taxed until you withdraw it. It is an OPTIONAL deduction from your paycheck.

4 11. Self-employed person who takes risk of owning business:
ENTREPRENEUR 12. Lifestyle Business: Your own hobbies and intends to keep it small and work it him/herself Venture Business: Intends to expand and become a corporation Self employment: Advantages: Disadvantages: owner makes all decisions must take risks (risky) sets the hours of the business long, hard work at first keeps all profits money tight at first Money received from sources other than actively working a job: UNEARNED INCOME

5 15. Earned Income Unearned Income Interest Disability Dividends Social Security Benefits Unemployment Benefits Pension (Retirement ) Wages (regular pay and OT) Salaries Tips Commissions

6 16. Perks: Office with a view, company car, parking space, coffee station 17. Benefits of paying taxes: public roads and highways police protection public schools national and local parks national security – armed forces 18. Disability Insurance: replaces lost income when illness or injury prevents an employee from working. It is an OPTIONAL deduction.

7 19. a. Regular Pay: 40 x $10 = $400 Overtime Pay: 5 x $15 = $75 Total Gross Pay: $475 b. Weekly salary: $39,000/ 52 weeks = $750/ week Gross Pay c. Gross pay per week = $750 750 x 10% = $75 federal income tax 750 x 6.2% = $46.50 social security tax 750 x 1.45% = $10.88 medicare tax Total Deductions = $132.38 750 – = $ Net Pay per week

8 Quiz your neighbor on the key terms- 3rd page on your study guide
Ch. 2 Quiz Today 5 minute opener: Quiz your neighbor on the key terms- 3rd page on your study guide Then: Quiz Review Game .

9 19. Self-employment Advantages and Disadvantages
can make the decisions can set your own hours can keep all the profits if fails, invested money is lost must take risks (risky) hard to get credit initial startup is hard work money tight at first Critical Listening Skills Evaluate the information Consider only important or relevant info Make decision on what is accurate and useful Focus and eliminated distractions Face the speaker, make eye contact, nod and show interest Mentally summarize main points

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