Part 1: Earning Statements

Working and Earning Earning Statements Key Ideas Employee earning statements include information about………………. gross wages, benefits, taxes and other deductions Gross vs. Net – define? Take home pay

What is a good wage? Median wage in US 2016 $849 per week or $44,148 per year for a 40-hour work week. That is before taxes / other deductions

men earned a median average of $927 per week while women earned only $758 or 81.8 percent of what males earned.  ACDC video https://www.youtube.com/watch?v=7fCBsugN_g0 https://www.youtube.com/watch?v=I-Q6fU5zfBw

Deductions Define…. money that is taken out of an employees gross pay for different purposes Think of examples of deductions

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) *largest deduction state income (4% of gross) local income taxes (2% of gross)

Deductions Other Examples: health insurance (medical, dental, vision) retirement contributions annuities/loan payments garnishment (for unpaid child support, owed back taxes, etc.) taxes - federal, state and local Social Security, federal income, state income, local income

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 Health Ins ($100 per pay) $2,400 401 k (10% of gross) $4,500 Social Security (7% of gross) $3,150 Fed.Income Tax (10% of gross) $4,500 see next slide State Income Tax (2% of gross) $900 Local Income Tax (1% of gross) $450 Total Deductions $15900 Net Income = I HAVE NOT EATEN YET! $29,100 = 64.6 % of Gross Income

Table 1. Single Taxable Income Tax Brackets and Rates, 2017 Taxable Income Bracket Tax Owed 10% $0 to $9,325 10% of Taxable Income 15% $9,325 to $37,950 $932.50 plus 15% of the excess over $9325 25% $37,950 to $91,900 $5,226.25 plus 25% of the excess over $37,950 28% $91,900 to $191,650 $18,713.75 plus 28% of the excess over $91,900 33% $191,650 to $416,700 $46,643.75 plus 33% of the excess over $191,650 35% $416,700 to $418,400 $120,910.25 plus 35% of the excess over $416,700 39.60% $418,400+ $121,505.25 plus 39.6% of the excess over $418,400

------------------------------------------------------------ $1026 Pay Check Deductions Federal Income Tax 300 State Income Tax 100 City Income Tax 70 Medicare 25 STRS 300 Health 60 Dental 3 Vision 1 Union 7 403 B 100 Credit Union 60 ------------------------------------------------------------ $1026 Not taxed on this income earned