Understanding your Pay Check

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Understanding your Pay Check
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"Understanding Your Paycheck" WOODEN
NICKEL

• Gross pay 1,222.02Deductions -----------
  Income Tax 244.40 Outgo Tax 45.21 State Tax
  61.10 Interstate Tax 5.89 County Tax 6.11 City
  Tax 12.22 Rural Tax 4.44 Back Tax 1.11 Front
  Tax 1.16 Side Tax 1.61 Up Tax 2.22 Down Tax
  1.11 Tic-Tacs 1.98 Thumbtacks 3.93 Carpet
  Tacks 0.98 Stadium Tax 0.69 Flat Tax 8.32
  Surtax 3.46 Ma'am Tax 2.60 Parking Fee 5.00 No
  Parking Fee 10.00 F.I.C.A. 81.88 T.G.I.F. 9.95
  Life Insurance 5.85 Health Insurance 16.23
  Disability 2.50 Ability .25 Liability
  Insurance 3.41 Dental Insurance 4.50 Mental
  Insurance 4.33 Reassurance 0.11 Coffee 6.85
  Coffee Cups 66.51 Calendar 3.06 Floor Rental
  16.85 Chair Rental 4.32 Desk Rental 4.43 Union
  Dues 5.85 Union Dont's 3.77 Cash Advances 0.69
  Cash Retreats 121.35 Overtime 1.26 Undertime
  54.83 Eastern Time 9.00 Central Time 8.00
  Mountain Time 7.00 Pacific Time 6.00 Grenwich
  Mean Time 24.00 Bathroom Time 6.05 Time Out
  12.21 Oxygen 10.02 Water 16.54 Electricity
  38.23 Heat 51.42 Misc. 144.38 Air Conditioning
  46.83 --------- Total, all Deductions
  1,222.00Take Home Pay 0,000.02

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http//www.connectionsforsuccess.com/quiz/slidesho
w.asp?quiz_id166 Instructions Click on the
correct choice. Click 'Next' for another
question.

• Paychecks Pre-Test True or False
• Your gross pay will always be larger than your
  net pay.
• It is possible for my net pay to be more than
  your gross pay.
• When an employer offers you benefits, it can
  save you .
• Employers will take out federal, state, and city
  taxes from your paycheck.
• Legally, you can choose not to pay taxes.
• Social Security Taxes FICA
• A pay stub and a paycheck are the same thing.
• A pay period can be weekly, bimonthly, or
  monthly.
• Deductions on your paycheck are for sick pay and
  vacations.
• Taxes are a deduction for only some employees.

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http//www.floridatechnet.org/inservice/fw/mod9tw2
.pdf

• For many people, the day they get their first
  paycheck at a new job is a time for celebration!
  But remember, new employees do not always get a
  paycheck on the first payday after they start
  work. It may take longer for the paperwork to go
  through. Many offices will give you a schedule
  of the dates your receive your pay.
• Most people get paid once a week, once every two
  weeks, or once a month. Your paycheck usually
  includes two parts. The first part is the actual
  check you take to the bank or cash. The check is
  usually your net pay or take-home pay.

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• When you get your first paycheck, be sure to
  check it over to make sure you understand each
  item that has been deducted. Take your paycheck
  to your supervisor or payroll right away if there
  is a problem, so they can get it straightened out.

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When you receive your first paycheck, it is an
exciting experience. You worked a forty-hour week
at ten dollars an hour, so you are expecting a
400 paycheck, right? Not exactly. It is true
that a paycheck shows how many hours worked and
the wage that you should receive, but it also
shows what taxes you pay and any other items that
you pay for through your paycheck. This section
will cover some of the most important information
that you will find on your paycheck and/or pay
stub.
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Money Vocabulary

• A paycheck is a check issued to an employee as
  payment for salary or wages. It is the paper that
  you use to cash your check or deposit it in the
  bank.
• A pay stub is a printed statement of the amount
  an employee is paid, showing deductions for tax,
  social security, and insurance. Pay stubs are an
  excellent way to keep track of how much money you
  earn, to track how many hours you work, and to
  record what is taken out of your paycheck.
  Employees who have their paychecks sent directly
  to their bank (called direct deposit) use their
  pay stubs as a receipt that they have been paid
  by their employer.

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When do I get paid, and how much?

• Employees receive paychecks every pay period.
• Most of the time the employer determines the pay
  period. It may be daily, weekly, or monthly.
  Sometimes an employee can choose when they
  receive their paychecks.
• Your paycheck should list the amount of money
  earned for the current pay period and the total
  amount of money earned in a calendar year
  (January to December), called the year to date
  earnings. You need to understand the difference
  between gross pay and net pay to find out how
  much money is earned on a paycheck.

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More Vocabulary

• Gross Income Your gross income is your total pay
  before anything is taken out. It includes any
  overtime, paid vocation time, or paid sick time
  you have earned.
• Net Income Your net income is the amount you
  are paid after deductions. This is your
  take-home pay.
• Income to Date Most paycheck studs will add up
  how much you have made so far during the calendar
  year.
• Pay Rate Your pay rate includes the amount you
  are paid. It is usually listed here by the hour.

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Just more Vocabulary

• Deductions All the additional money taken out of
  your paycheck will be listed as deductions.
  These include the benefits and deductions
  described in Teamwork 2, such as federal tax,
  FICA, health insurance, retirement, and other
  deductions. http//www.runet.edu/pers-web/forms/p
  aystub.pdf
• Pay period The pay period usually list the
  beginning and ending dates of the period for
  which you are being paid. You should check this
  carefully to make sure you are being paid for all
  the time you have worked.

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Karens storyKarens First Paycheck
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Citizens Grocery Bank of Daytona Beach No. 3000413854 PAY TO THE ORDER OF Karen Rice Date 9/11/04 Four Hundred and eight dollars and 78 cents. Pay this amount 408.78 Not good after 90 days from date of issue Citizens Grocery Bank of Daytona Beach No. 3000413854 PAY TO THE ORDER OF Karen Rice Date 9/11/04 Four Hundred and eight dollars and 78 cents. Pay this amount 408.78 Not good after 90 days from date of issue Citizens Grocery Bank of Daytona Beach No. 3000413854 PAY TO THE ORDER OF Karen Rice Date 9/11/04 Four Hundred and eight dollars and 78 cents. Pay this amount 408.78 Not good after 90 days from date of issue
Earnings Statement Keep this Document with your Income Tax Records Name Karen Rice Social Security Number 571-20-3111 Check no. 3000713854 Pay Period 8/30/04-9/11/04 Earnings Statement Keep this Document with your Income Tax Records Name Karen Rice Social Security Number 571-20-3111 Check no. 3000713854 Pay Period 8/30/04-9/11/04 Earnings Statement Keep this Document with your Income Tax Records Name Karen Rice Social Security Number 571-20-3111 Check no. 3000713854 Pay Period 8/30/04-9/11/04
Current Pay Rate 6.25 Dedications Dedications
Hours Worked Amounts Earnings Current to date
Regular 80.00 500.00 Overtime 0.00 0.00 Federal Taxes 22.00 FICA 43.22 Health Insurance 20.00 Dental Plan 5.00 Life Insurance 10.00 22.00 43.22 20.00 5.00 10.00
Gross Pay 500.00 Deductions 91.22 Net Pay 408.78 Gross Pay 500.00 Deductions 91.22 Net Pay 408.78 Gross Pay 500.00 Deductions 91.22 Net Pay 408.78
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Deductions, Reductions, and taxes

• In tax law, a deduction is an amount that you can
  subtract from the total amount on which you owe
  tax. An example would be wages deducted for child
  support.
• A reduction is an amount that you can subtract
  from your paycheck before without it being taxed,
  like health care.
• Taxation is used by the government and the state
  to raise money. This money, or revenue, is used
  many times to pay for services for the public
  that may not be paid for entirely by an
  individual alone. A good example of this would be
  health care and welfare services.

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Benefits

• Benefits are payments (other than a paycheck) or
  other benefits (health insurance) given to
  employees by employers. Benefits may be required
  by law, offered by an employer, or requested by
  employees as a group through collective
  bargaining. The following are examples of
  employee benefits.
• Paid holidays Paid vacations
• Paid personal leave Paid funeral leave
• Paid military leave Paid jury-duty leave
• Paid and unpaid family leave Paid sick leave
• Short term disability insurance Medical care
• Long-term disability insurance Dental care
• Defined benefit pension plans Life insurance
• Defined contribution plans Vision care
• Flexible benefit plans Travel pay
• Reimbursement accounts Child care
• Wellness programs Educational assistance
• Ride-share programs

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W-4 Forms

• http//www.irs.gov/pub/irs-fill/fw4_03.pdf

• Withholding Income Tax From Your Paycheck
• The amount of income tax your employer withholds
  from your regular pay depends on two things
• The amount you earn
• The information you give your employer on Form
  W-4 (and DE 4, if desired).
• Form W-4 includes three types of information that
  your employer will use to figure your
  withholding.
• Whether to withhold at the single rate or married
  rate.
• How many withholding allowances you claim (each
  allowance reduces the amount withheld).
• Whether you want an additional amount withheld.
• If your income is low enough that you will not
  have to pay income tax for the year, you may be
  exempt from withholding. See Resources below
  for more information.
• NEW Job
• When you start a new job, you must fill out Form
  W-4 (and DE 4, if desired) and give it to your
  employer. Your employer should have the forms. If
  you later need to change the information you
  gave, you must fill out a new form.

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What are Social Security taxes?

• Take a look at your pay stubthe part that shows
  how much is taken out for the various taxes and
  benefits each pay period. One of those deductions
  is for Social Security and Medicare taxes. On
  some pay stubs it's called FICA, which stands for
  Federal Insurance Contributions Act, the law
  that authorized payroll deductions for Social
  Security.
• Social Security is part of almost everyone's
  life. Social Security protects more than 150
  million workers and pays benefits to more than 45
  million people.

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Here's what you and your employer are buying with
your Social Security taxes

• Retirement coveragebenefits paid monthly to
  eligible retired workers as early as age 62
• Disability coveragebenefits paid monthly to
  eligible workers, all ages who have a severe
  disability
• Family coveragebenefits paid monthly to the
  spouses and children (including dependent adults
  who have been disabled since childhood) of
  eligible retired and disabled workers
• Survivors coveragebenefits paid monthly to the
  eligible widow/widower and children of a deceased
  worker and
• Medicare benefitshelp with hospital bills, as
  well as limited coverage of skilled nursing
  facility stays

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Where Your Social Security Taxes Go

• Out of every dollar that workers and their
  employers pay in Social Security taxes
• 85 cents goes to a trust fund that pays for
  monthly benefits to retirees and their families
  and to widow, widowers and children of workers
  who have died and
• 15 cents goes to a trust fund that pays benefits
  to people with disabilities and their families.
• Your Social Security taxes also pay for
  administering Social Security. How Social
  Security works is based on a simple process.
  While you work, you pay taxes into Social
  Security and when you retire or become disabled,
  you (and your family members) collect monthly
  benefits from Social Security. Or when you die,
  your family may collect survivors benefits.

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Federal Income Tax-Federal Income Tax (FIT) An
employer is required to withhold a specified
amount or percentage from each payment of wages
to each employee to collect currently the
approximate federal income tax liability owed on
those wages. The number of withholding exemptions
claimed by the employee is taken into account in
calculating the amount withheld
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State Taxes

• State taxes are used to fund programs that help
  the state and its residents. State highways and
  transportation projects, like the new system of
  bridges going up across the river, receive tax
  dollars. Universities and schools also get
  funding from the state, along with the state law
  enforcement system, including state courts,
  prisons, and police. The state pays for welfare
  and special services programs. We also fund state
  parks and recreation, and oversee professional
  license programs, given to such groups as
  drivers, doctors, lawyers, and barbers, to make
  sure they maintain proper standards of conduct
  and safety.

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• Vocabulary Quiz
• Gross Pay
• Earnings
• Benefits
• Net Pay
• Deductions
• Rate
• Federal income tax
• FICA / Medicare

1. The amount of money that you have left to take
   home on your paycheck after all the deductions
   are removed.
2. Money paid from your paycheck to the US
   government.
3. Money taken from your paycheck, paid to the
   government, then sent as a monthly check to
   senior citizens.
4. The money that you make, or earn, at work.
5. Your hourly pay or wage.
6. The total amount of money you made during a pay
   period.
7. Extra that the company pays besides what you earn
   at work, like sick pay, health insurance, paid
   vacation days, a retirement plan, etc.
8. Money taken from your paycheck for health
   insurance, city, state, and federal taxes,
   disability insurance, and anything else.

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How many hours did you work this pay period?
What was your regular pay? Overtime pay? What
was the amount of your gross earnings? How much
was withheld for federal income tax? State income
tax? How much was deducted for social security?
What was the amount withheld for insurance?
What were the total deductions for this pay
period? What percent of your gross pay was
withheld? If you work the same number of hours
for the next 3 weeks, what will be your total net
pay for the month? Why is it important to check
your pay statement and keep it for your records?
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YOUR FIRST PAYCHECK HAS FINALLY ARRIVED!
DECISIONS..DECISIONS..DECISIONS...

• http//www.macomb.k12.mi.us/wq/cg2ucs.htm
• Web quest

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Resources

• http//www.macomb.k12.mi.us/wq/cg2ucs.htm
• http//www.connectionsforsuccess.com/quiz/match.as
  p?quiz_id172
• http//www.runet.edu/persweb/forms/paystub.pdf
• http//www.lake.k12.fl.us/stw/Lesson20Plans/paych
  eck.html
• http//www.tax.ca.gov/paycheckind.htmlTop