Working and Earning: Earning Statements also called - Pay Checks or Pay Stubs Key Ideas Employment provides a means of creating personal income Employee earning statements include information about………………. gross wages, benefits, taxes and other deductions

Overview Information Employees are able to monitor their salaries through the information provided on their earning statements provided each time an employee is paid How often do you receive earnings statements (usually on a bi-weekly or monthly basis) includes information about ……. hours worked, gross vs. net income, deductions, etc.

Gross vs. Net Income “gross” income is…….. the total amount of money an individual makes before deductions “net” income is……… the total amount of money that an employee actually gets after deductions Net income is also called… “Take Home Pay”

Gross is usually reflected in a general salary or hourly figure Pete earns a salary of $45,000/year Sarah earns $13.50/hour Neither of these employees “takes home” that full amount

Deductions Examples……Brainstorm……. Define…. money that is taken out of an employees gross pay for different purposes Examples……Brainstorm……. health insurance (medical, dental, vision) retirement contributions annuities/loan payments garnishment courts force your employer to send portions of your pay check to the person/co. you owe (for unpaid child support, owed back taxes, etc.) – taxes - federal, state and local Social Security, federal income, state income, local income

Just Curious What do you expect to earn in your first full time job. That is : Your career after completing training program or graduating college

Example: Pete earns a salary of $45,000/year and gets paid every 2 weeks. Then, money is deducted for health insurance ($100/pay) 401k (10% of gross) Social Security (7% of gross) federal income tax (20% of gross) state income (4% of gross) local income taxes (2% of gross)

Deductions Deduction Amount Gross Income $45,000 Health Ins ($100 per pay) 401 k (10% of gross) Social Securtity (7% of gross) Fed.Income Tax (20% of gross) State Income Tax (4% of gross) Local Income Tax (2% of gross) Total Deductions

Deductions Deduction Amount Gross Income $45,000 Totals for year: Health Ins ($100 per pay) $2,400 401 k (10% of gross) $4,500 Social Securtity (7% of gross) $3,150 Fed.Income Tax (20% of gross) $9,000 State Income Tax (4% of gross) $1,800 Local Income Tax (2% of gross) $900 Total Deductions $21,750 Net Income = I HAVE NOT EATEN YET! $23,250 = 51.6 % of Gross Income

------------------------------------------------------------ $1154 Pay Check Deductions Federal Income Tax 360 State Income Tax 110 City Income Tax 70 Medicare 25 STRS 350 Health 60 Dental 3 Vision 1 Union 15 403 B 100 Credit Union Savings 60 ------------------------------------------------------------ $1154 Not taxed on this income earned