Earning Potential Amount of money you can receive based on: Amount of money you can receive based on: Level of education Level of education Career path Career path Level of management Level of management Career demand Career demand Location Location

Earning Potential The Value of Education High school dropout (no degree) $19,226 High school diploma $28,950 Two-year college (associate’s degree) $36,395 Four-year college graduate (bachelor’s degree) $51,568 Post-graduate degree (6+ years) $67,073

Earning Potential Average Lifetime Earnings Professional Degree $3,296,840 College graduate (bachelor’s degree) $1,878,760 Two-year college associate’s degree $1,455,960 High school diploma (or GED) $1,167,480 Ninth-grade education or less $787,400

Mulitple Choice Question #2 ____ 2.) If you went to college and earned a 4-year degree, how much more money could you expect to earn than if you only had a high school diploma? A little more; about 20% A little more; about 20% A lot more; about 70% A lot more; about 70% About 10 times as much About 10 times as much No more; I would make about the same either way No more; I would make about the same either way

Wages Income- payment people receive for providing resources in the market Income- payment people receive for providing resources in the market Wages- a type of payment for labor: an hourly pay rate by the number of hours worked Wages- a type of payment for labor: an hourly pay rate by the number of hours worked Salaries- annual amount paid monthly for a specified number of hours Salaries- annual amount paid monthly for a specified number of hours

Mulitple Choice Question #1 ____ 1.) Which of the following best describes the primary sources of income for most people age 20-35? Profits from business Profits from business Rents Rents Dividends and interest Dividends and interest Salaries, wages, tips Salaries, wages, tips

Taxes Taxes- government fees on business and individual income, activities, products or property Taxes- government fees on business and individual income, activities, products or property Property, income, sales, etc. Property, income, sales, etc. Gross pay- the amount people earn per pay period before any deductions or taxes are paid Gross pay- the amount people earn per pay period before any deductions or taxes are paid Net pay- the amount people receive after taxes and other deductions are taken out Net pay- the amount people receive after taxes and other deductions are taken out

Taxes (cont.) W-4 Form- W-4 Form- Required by the Internal Revenue Service (IRS) Required by the Internal Revenue Service (IRS) Must be completed by employees before they start a job. Must be completed by employees before they start a job. Used by employers to determine the amount of withheld income tax Used by employers to determine the amount of withheld income tax FICA- (Federal Insurance Contributions Act) FICA- (Federal Insurance Contributions Act) Another tax that most workers and employers pay Another tax that most workers and employers pay Funds Social Security and Medicare Funds Social Security and Medicare W-2 Form- W-2 Form- A form employers must provide to employees shortly after year-end to report annual income and withholding for the employee’s tax return. A form employers must provide to employees shortly after year-end to report annual income and withholding for the employee’s tax return.

Multiple Choice Question #12 ____ 12.) Your take home pay from your job is less than the total amount you earn. Which of the following best describes what is taken out of your total pay? Federal income tax, social security, and Medicare contributions Federal income tax, social security, and Medicare contributions Federal income tax, sales tax, and social security contributions Federal income tax, sales tax, and social security contributions Social security and Medicare contributions Social security and Medicare contributions Federal income tax, property tax, Medicare, and social security contributions Federal income tax, property tax, Medicare, and social security contributions

Multiple Choice Question #14 ____ 14.) Which of the following is true about sales taxes? You don’t have to pay the tax if your income is very low You don’t have to pay the tax if your income is very low It makes things more expensive for you to buy It makes things more expensive for you to buy The national sales tax percentage rate is 6% The national sales tax percentage rate is 6% The federal government will deduct it from your paycheck The federal government will deduct it from your paycheck