Download presentation
Presentation is loading. Please wait.
Published byOswald Bell Modified over 7 years ago
1
Chapter 2 Net Pay
2
2-1 Earnings Statements Earning Statements – the record of earning and deductions (usually attached to your paycheck). Gross pay - total pay without deductions Net Pay – take home pay with deductions Deductions – amounts withheld on a paycheck
3
Verify the total amount withheld Reg. PayOvertime Pay Gross Pay Total Deduction s Net Pay 214.290.00214.2982.97131.32 FederalStateLocalFICAOther 32.5011.520.0015.320.00 PensionUnion Dues Insuranc e SavingsOther 10.193.167.282.001.00 Earnings Taxes Withheld Personal Deductions
4
Find total amount withheld for taxes Find the sum of the amounts in the row labeled taxes 32.50+11.52+15.32=59.34 Total Taxes withheld 59.34
5
Find the total amount of personal deductions Find the sum of the amount in the row labeled personal deductions 10.19+3.16+7.28+1.00+2.00 = 23.63 Total Personal Deductions 23.63
6
Verify the amount under total deductions is correct Find the sum of tax and personal deductions 59.34+23.63= 82.97 The amount on the total deductions on the earning statement should be 82.97
7
Verify that total deductions from earnings Gross pay - Net Pay = Total deductions 214.29 - 131.32 = 82.97
8
Class Exercise Reg. PayOvertime PayGross PayTotal DeductionsNet Pay 472.670.00472.67288.62 FederalStateLocalFICAOther 70.9023.656.8233.790.00 PensionUnion Dues Insurance SavingsOther 22.316.2210.155.005.21
9
Use the Earning Statement to answer the following questions How much was withheld for tax? 135.16 How much personal deduction was there? 48.89 What is the total deductions? 184.04 How much less what the net pay from the gross pay? 184.05
10
2-5 Take Home Pay Net Pay - The amount a worker receives for a pay period after all taxes and deductions have been withheld from the gross pay.
11
Find the Net Pay Find the gross pay Regular pay + overtime pay Find the total deductions Taxes withheld + Personal deductions Find the net pay Gross pay – total deductions
12
Find the Net Pay Reg. PayOvertime PayGross PayTotal DeductionsNet Pay 214.2938.45 FederalStateLocalFICAOther 32.5011.520.0016.390.00 PensionUnion Dues Insurance SavingsOther 10.193.167.282.001.00
13
Federal Income Tax Employers are required by law to withhold a portion of each employees salary from every paycheck. This amount is applied toward the federal income tax the employees owes at the end of the year.
14
Federal Income Tax The amount withheld from a paycheck depends on certian factors such as marital status, how much is earned, and number of exceptions. Exceptions – the amount that can be deducted for dependents. An employee can claim exemptions for him/her self, spouse, and any kids, or other dependents he/she supports
15
Class Exercise NameWeekly PayMarriedExemptionsFederal Tax Anna262.50N1 Jack264.89Y2 Bill198.50N1 Mary298.62Y6 ** Use text p. 73 for tax information
16
2-3 State and Local Tax Employers are required to withhold state and local tax from a paycheck. The amount withheld is figured as a percent of the work’s taxable earnings Taxable earnings depend on the number of exemptions claimed by the employee To determine taxable earnings, multiply the number of exemptions by the amount allowed for each and subtract the result from the annual earnings
17
Paula earns 14,775/year and claims 2 exemptions. Her local tax rate is 6.5%. The amount allowed for each exemptions is 800. How much local local income tax should be withheld each week? Calculate taxable income Amt allowed x # of exemptions 800 x 2 = 1600 Subtract total allowed from earnings 14,775 - 1600 = 13,175 Calculate the tax Multiply earnings by tax rate 13,175 x 0.065 = 856.38 Compute the amount withheld for each pay Divide tax by number of pays in a year 856.38 / 52 = 16.47
18
2-4 Social Security (FICA) Tax Social security provides retirement benefits and disability benefits for workers who have contributed to the system The amount withheld for FICA is determined by law and is at a rate of 7.65% of a workers annual earnings Employers must also contribute for each employee at an equal rate. Self employed individuals must contribute at a rate of 15.3%.
19
Find the amount of FICA tax on the following earnings NameWeekly Salary Self Employed FICA Tax Gina419.22No Nelson135.40No Benji100.00No Mareth297.56Yes Zelda358.69No Dale642.37Yes
20
Medical Insurance Consumer workbook page 65 Complete as a class discussion
21
Test Time
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.