Lesson 1: Reading a Pay Stub. Objectives: Identify sections of a pay stub Determine how to calculate net pay Recognize various paycheck deductions.

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Presentation transcript:

Lesson 1: Reading a Pay Stub

Objectives: Identify sections of a pay stub Determine how to calculate net pay Recognize various paycheck deductions

Employee & Company Information The employee number, also known as the employee ID, identifies the employee. The department number identifies what department to which the employee belongs. Payment period – the period of time for which the employee is being paid. Weekly Bi-weekly

Earnings Salaried employees earn the same amount of pay every pay period. Pay is based on how much an employee earns per year. PTO – paid time off, also known as vacation. Sick – sick time, if offered by employer. Current – the amount of money earned during the current pay period. Year to Date (YTD) – the total amount of money earned for the entire year, up to the current pay period. Wage employees: Regular – regular hourly wage. Overtime – time paid for hours over 40 hours per week. Usually paid at time and a half.

Earnings Net pay = Gross pay – Deductions

Deductions - monetary subtractions from the gross pay. OASDI - stands for old age, survivor and disability insurance, which is more commonly referred to as Social Security. Federal taxes - a percentage of gross pay deducted by the Internal Revenue Service (IRS). State taxes - Vary from state to state. Medicare - Medical coverage for eligible retired or disabled employees who have contributed to the program.

Deductions- monetary subtractions from the gross pay. 401(k) - is a retirement savings plan, which allows employees to save and/or invest, in preparation for retirement. Direct deposit (DD) - reflects the amounts that are directly deposited into the bank accounts specified by the employee. Insurance deductions - payments toward medical, dental, and life insurance, if applicable. These deductions are made pre-tax. Total deductions - shows the total amount that has been deducted from an employee’s paycheck. Check amount - reflects the amount the employee will receive.

Time Off Time off may include: Paid Time Off (PTO) or Vacation Sick time Personal days

Review

Summary: Identified sections of a pay stub Determined how to calculate net pay Recognized various paycheck deductions