1. Unit 2 Lesson 2 Notes 1 Paystubs Where is my money?

2. What will you learn today? To identify the various sections of a paycheck stub. To calculate net pay. To identify possible job related expenses.

3. Let’s Review Pay Period -The length of time for which an employee’s wages are calculated Overtime - The amount of time a person works beyond 40 hours in a work week Overtime Pay - Pay for work beyond 40 hours in a work week that is at least one and one-half times the regular rate of pay. gross pay - The amount of money earned during the pay period before deductions

4. Let’s Review Do you remember the formula for calculating gross pay? Gross Pay= Hours worked X Wage John works at Burger King and his hourly wage is $8.50. Last week he worked 30 hours. What is John’s Gross Pay? Hours worked (30) Hourly wage ($8.50) × Let’s multiply! 30 ×$8.50 = $255.00

5. Paycheck All employees earn an hourly or piece rate wage. Most employers pay employees with a paycheck. Paycheck-A form of payment to an employee

6. Earnings Statement Paychecks come attached to an earnings statement. The earnings statement is your record of what you are being paid and the deductions being taken from your gross pay for that pay period. You should check your earnings statement each pay period for accuracy regarding the number of hours you worked and deductions. Earnings statement- the “paycheck stub” listing gross pay and deductions

7. Earnings Statement (Pay Stub) There are 3 general sections to an earnings statement (pay stub). –Earnings Section –Withholdings and Deductions Section –Personal Information Section

8. Earnings ① ② ③④ ⑤⑥ ⑦ ❶

9. Withholdings and Deductions ❷

10. Personal Information ❸

11. Deductions Deductions-Money subtracted from gross pay for required taxes, employee insurance, and retirement benefits

12. Federal income tax - The amount required by law for employers to withhold from earned wages to pay federal income taxes Federal Income Tax

13. Deductions-Federal Income Taxes You Try During this pay period, how much did Temika pay in federal taxes?

14. State Income Tax State Income Tax-The percentage based on income deducted from a person’s paycheck by the state government to pay for government provided services such as roads, public schools and parks.

15. Deductions-State Taxes You Try During this pay period, how much did Temika pays in state taxes?

16. FICA FICA- Federal Insurance Contributions Act (FICA) FICA is a federal tax that funds Social Security and Medicare. Social Security and Medicare are income and insurance programs that help older Americans. Total FICA deducted from a person’s gross pay each pay period is 7.65%.

17. Deductions-Federal Programs (FICA) You Try During this pay period, how much did Temika pay in FICA?

18. Job Related Expenses

19. Deductions-Work Related Expenses You Try What are two work related expenses listed on this pay-stub?

20. Net Pay Net Pay-The amount of money left after all the deductions have been taken from the gross pay earned in the pay period. This is also known as take-home pay.

21. Net Pay -You Try During this pay period, what was Temika’s net pay?

22. Salary Salary-the amount of money an employer pays an employee for work performed based on their hourly wage.

23. Salary- You Try If Temika was completing an application that asked her what her weekly salary was, what amount would she list?

24. Calculating Net Pay Step 1: Find the total of all the deductions taken from your paycheck. You do this by adding each deduction. Step 2: Subtract the total deductions from your gross pay.

25. Calculating Net Pay Step 2: Subtract the total deductions from your gross pay. $24.92 $53.40 $20.00 $27.23 $ 5.00 + $130.55 − Step 1: Find the total of all the deductions taken from your paycheck. $356.00 $130.55 $225.45 Gross Pay Deductions Net Pay

26. Example 1 Scenario: Grady had his 90 day evaluation last week. He was told because of his excellent work ethic; he would receive a 25 cents pay rate increase per hour. Today is payday and Grady can’t wait to see how his raise will affect his paycheck. Let’s help Grady figure out his “net” pay Step 1: Add deductions.Step 2: Subtract deductions from gross pay. $55.11 + $25.72 + $28.11 + $20.00 + $5.00= =$133.94 $367.38 $133.94 $233.44

27. You Try Scenario: Molly tracked the hours she worked during this pay period. She worked 37 hours. Her current wage is $9.00 per hour. When she picked up her paycheck she was surprised. It was not what she was expecting. She decided to double check her “pay-stub” to make sure her paycheck was correct. Oh no, Molly forgot about deductions. Please help Molly find her net pay. Step 1: Sum of deductions.______________ Step 2: Remaining salary. _______________ $209.47 $123.74

28. In summary, We learned the three sections of a pay- stub are __________, ___________, and _________ ___________. We learned to calculate the net pay by __________the total deductions from the ________ pay. deductions personal information earnings subtracting gross

29. Review Step 1: Add all of the deductions________ Step 2: Subtract the deductions from the gross pay. _________ $450.35 $67.55 $31.53 $33.78 $20.00 $152.86 + - $297.49 $152.86 Gross Pay Deductions Net Pay Scenario: Brad’s gross pay is $450.35. He has several deductions taken from his gross pay. They are: Federal Income Tax -$67.55, State Income Tax-$31.53, FICA- $33.78, Dental Insurance-$20.00. Let’s help Brad figure out his net pay.