1. WHAT HAPPENED TO MY PAYCHECK?

2. GROSS PAY (earnings): Taxable income before any adjustments TOTAL COMPENSATION: DIRECT + INDIRECT COMPENSATION DIRECT COMPENSATION: payments in $ (wages, bonuses, commission) INDIRECT COMPENSATON: FRINGE BENEFITS: benefits paid by the employer (insurance, time off etc.)= additional 40% above direct compensaton

3. NET PAY=GROSS PAY-MANDATORY AND VOLUNTARY DEDUCTIONS MANDATORY DEDUCTIONS: must be deducted (laws) Income Tax: 28% Federal 7.5-10% State 3.5% City

4. FICA: Social Security, Medicare Unemployment Insurance NYS Disability NYS Workmen’s Compensation VOLUNTARY DEDUCTIONS  Insurance premiums  Pension, 401K, IRA contributions  Savings plans, savings bonds  Transit check

5. NET PAY “Pay yourself first” Financial goals:  Short term <1 year  Intermediate 1-3 years  Long term >3 years Needs vs. Wants Emergency fund: 3-6 months salary

6. BUDGETING DISCRETIONARY INCOME (surplus)=NET PAY – necessities Fixed vs. variable expenses