PAYCHECKS, PAY PERIODS, TYPES OF PAY. Pay Periods In order to understand your paycheck, you need to understand pay periods. How often you get paid.

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Presentation transcript:

PAYCHECKS, PAY PERIODS, TYPES OF PAY

Pay Periods In order to understand your paycheck, you need to understand pay periods. How often you get paid.

PAYCHECKS Gross Pay vs. Net Pay Gross is total pay before deductions. Net Pay is TAKE HOME Pay, or Pay after deductions

GROSS PAY! DEDUCTIONS NET PAY

What are examples of some deductions? Social SecuritySocial Security, Federal, State and Local Income taxes. Medicare, Health Insurance, retirement plans, pre-tax savings plans (401k, etc)

Pay Periods and Types of Pay

Weekly Duh How many weeks are in a year? 52 weeks in a year 52x a year

Monthly How many times per year would you get paid if you got paid monthly? 12x a year. Not so common.

Most employers… Use either every two weeks or twice a month? Same thing right…? NOT REALLY. Every Two Weeks (Every other Friday) Twice a Month (15 th and 30 th or the month)

Biweekly Every two weeks AKA Every other Friday How many times are you paid a year if you are paid Biweekly? 52 weeks a year, 26 paychecks.

Semimonthly AKA Twice a month AKA “The 15 th and 30 th ” How many times a year are you paid if you are paid ‘semi-monthly’ 12 months a year, 2x a month = 24x a year.

What’s a better deal? 2,000 a paycheck, paid semimonthly. 24 x 2000 = $48,000 2,000 a paycheck, paid biweekly 26 x 2000 = $52,000 a year. $1500 a paycheck, paid semimonthly x 24 = 36,000 a year $1400 a paycheck, paid biweekly x 26 = 36,400 a year

TYPES OF PAY? How do people get paid?

Hourly Hourly wage. Some jobs can be ‘under the table’ Usually not long term Not really legal, tax wise Overtime can be given for hours worked over 40. Time-and-a-half Extra Pay for working more than X hours in a week or working on a holiday. Not standard, each company has diff. policies.

Salary A fixed amount based on a years work. May have set hours to be there, but salaried employees often work extra hours beyond scheduled for no extra pay.

Commission A percentage of the sales come back to you. Salesman (commision) Waiters/Servers (tips)

By the Job AKA Piecework, AKA Contract Work Get paid a certain amount per job Could be a bid or estimate Most common with business owners

SALARY PROS CONS

HOURLY PROS CONS

COMMISSION PROS CONS

CONTRACT / BY THE JOB PROS CONS