1. Understanding Pay, Benefits, and Incentives
Money Management

2. Gross Pay, Deductions, and Net Pay
Gross Pay: total amount you earn before any deductions are subtracted.
Hourly Wages
$7.50 * 40 hours = $ Regular Pay
Overtime
$7.50 * 1.5 (represents time and a half) = $11.25
$11.25 (overtime pay) * 5 = $56.25

3. Regular Pay plus Overtime Pay = Gross Pay
$7.50 * 40 hours Regular Pay = $300.00
$11.25 (overtime pay) * 5 hours = $56.25
Gross Pay $356.25
Go to Page 120 in the Personal Finances Textbook

4. Deductions Social security tax Federal income tax
State income tax (not all states have income tax)
Michigan
Other optional deductions
401 K (investment)
Flex spending
Insurance
Union dues

5. Net Pay Net pay: Pay after deductions are taken out of your gross pay.
Regular wages or salary + Overtime = gross pay
Gross pay – deductions = net pay

6. What is the difference between an hourly employee and a salaried employee?
Salaried employees do not receive additional pay for overtime work. Gross pay will be the same every pay period.
52 weeks in a year/2 weeks per period = 26 pay periods
$24,000/26 pay periods = $ per pay check

7. Employee Withholding Sheet
Page 122 textbook
At this time some of you will be on the computers completing Virtual Business Personal Finance Finding a Job simulation

8. Benefits and Incentives
Profit Sharing – allows employees to receive a portion of the companies profits at the end of the corporate year
Paid Vacations and Holidays
Employee services
Retail may give you %age off clothes
Child Care
Sick Pay

9. More Benefits and Incentives
Leaves of Absence
Insurance
Bonuses and stock options
Pension Plans
Travel Expenses

10. Categorize Benefits
ESSENTIAL
IMPORTANT
NICE TO HAVE

11. Solve Problems and Explore Issues
Page 140 complete Problems 1-5