1. Journal
You can choose whether you want to be paid $50,000 salary for the whole year of $20 an hour for however long you work. You will get time and a half for overtime over 40 hr/week. Which option would you choose? Why?

2. Net Income
Day 2 - Unit 1 - Budgeting

3. Mark worked 34 hrs. last week. He is paid an hourly wage of $9.25.
How much did Tanner make?
When Mark received his paycheck it was for $ Why wasn’t it for the full amount?

4. NET INCOME
The amount of money you have left after your employer subtracts all tax withholdings and personal deductions from your gross pay.

5. Federal Income Tax (FIT)
Required by law, a certain amount of money withheld from your pay.
Amount withheld depends on your income, marital status, and withholding allowances.
Provides money to pay for federal government agencies and services.

6. Withholding Allowances
AKA – Exemptions
You claim allowances for yourself, your spouse and anyone others you support.

7. Form W-4 A form you fill out when first hired.
Allows your employer to withhold the correct amount of federal income tax from your pay.

8. State Income Tax
A certain amount of money the state you live in requires your employer to withhold.
Pays for state government agencies and services.
Usually a % of your income it also uses exemptions to determine amount of withholdings.

9. FICA Federal Insurance Contributions Act

10. Social Security Taxes (SS)
Deducts a percent of your income as taxes to pay for retirement and disability benefits.
6.2% tax rate on income under $113,700

11. Medicare
Deducts a percent of your income as taxes to provide medical insurance.
1.45% tax rate on all income

12. SELF-Employed SS tax rate: 12.4% on income under $113,700.
Medicare tax rate: 2.9% on all income.

13. Group Health Insurance
Many businesses offer group insurance plans to their employees.
Costs less to purchase than individual insurance.

14. OTHER Retirement accounts (401k) Charity (M.E.F.)
Flex Accounts – Medical

15. Statement of Earnings
A document that records your gross pay, all withholdings, and your net income for each pay period.

16. Statement of Earnings

17. Example 1
Angela Moore’s gross weekly salary is $600. She is married and claims 3 allowances, so her Federal Income Tax will be $500. The state tax is 1.5% of gross pay. Each week she has $28.40 deducted for medical insurance and $5.00 for charity.