Employee Pay and Benefits Chapter 6

W-4

Gross/Net Pay Gross Pay – the amount of money you earn before any deductions are made Net Pay – the amount you receive on your paycheck, also called take home pay Hourly Wages – the agreed upon rate of pay Hourly wages times hours worked equal gross pay $9.00 x 40 hrs = $360.00

Overtime Pay Standard workday is 8 hours Standard workweek is 40 hour Overtime Hours – hours earned above 40 hours/week Overtime According to the Fair Labor Standards Act, overtime is 1.5 times the regular hourly pay $9.00 regular pay = $13.50 overtime pay ($9.00 * 1.5) 40 hours x $9.00 = $360.00 5 hours x $13.50 = $ 67.50 Gross Pay = $427.50

Salary Monthly Salary Annual Salary Get paid same no matter how many hours worked Some employer do pay an overtime minimum wage for anything over 40 hours Annual Salary Divided into equal amounts Either 24 or 26 payments per year

Deductions Required by law: Elective Deductions: Federal Income Tax State Income Tax Social Security (FICA) Tax Elective Deductions: Union dues Health insurance payments Retirement such as IRAs Investments like mutual funds Charitable donations By law your pay check must have a detailed list of all deduction

Paystub

W-2

W-2

Benefits and Incentives Profit Sharing Paid Vacations and Holidays Employee Services Sick Pay Leaves of Absence Insurance Bonuses and Stock Options Travel Expenses Pension and Savings Plans Discounted Shopping Wellness Programs

Paid Vacations and Holidays Profit Sharing Allows employees to receive a portion of the company’s profit at the end of the year Employees who profit share identify closely with the company, more likely to reduce waste, and increase productivity Paid Vacations and Holidays People working holidays are usually paid double

Employee Services Sick Pay Discounts Social and recreational programs Free parking Tuition reimbursement Daycare centers Free counseling Sick Pay 3 to 10 days per year

Leaves of Absence Insurance Without pay usually Maternity Completing education Illness (employee or family) Injury Family and Medical Leave Act Get up to 12 weeks unpaid leave Employers must maintain health coverage Must reinstate job Insurance Health Insurance Life Insurance Dental Insurance Vision Insurance

Bonuses and Stock Options Bonuses for no serious accidents Goal reaching bonuses By shares at certain prices for certain amount of time Pension and Savings Plans 401k Sometimes employers with match what the employee puts in the account Travel Expenses Company car or paid mileage for using own car Food, motel, and other expenses are paid for

Flextime or work from home Wellness programs Employees discounts on their monthly health insurance premiums Cash rewards Discounted or free gym memberships Offering healthier food options at work Smoking cessation and weight-management programs Flextime or work from home