| Gross Pay | Net Pay | FICA | Checking Accounts | Vocabulary |
| 10 | 10 | 10 | 10 | 10 |
| 20 | 20 | 20 | 20 | 20 |
| 30 | 30 | 30 | 30 | 30 |
| 40 | 40 | 40 | 40 | 40 |
| 50 | 50 | 50 | 50 | 50 |
| Final Question | ||||
What is the difference between a wage earner and a salary earner?
What is the difference between a wage earner and a salary earner?
Wage earners make a set amount of money (a wage) for each hour that they work. Salary workers are paid an agreed-upon amount of money for the entire year, split up evenly into a set number of paychecks (weekly, bi-weekly, semi-monthly, etc.).
Calculate the gross pay earned by this wage earner:
wage = $10.60 per hour
hours worked = 32.5
Calculate the gross pay earned by this wage earner:
wage = $10.60 per hour
hours worked = 32.5
Gross Pay = $344.50
(32.5 x $10.60)
Calculate the gross pay earned by this wage earner:
wage = $10.60 per hour
overtime wage = $15.90
hours worked = 44.5
*** assume overtime is for hours worked beyond 40 ***
Calculate the gross pay earned by this wage earner:
wage = $10.60 per hour
overtime wage = $15.90
hours worked = 44.5
*** assume overtime is for hours worked beyond 40 ***
Gross Pay = $495.55
(40 x $10.60 + 4.5 x $15.90)
Calculate the gross paycheck amount for this salaried worker:
annual salary = $57,800
semi-monthly pay periods
Calculate the gross paycheck amount for this salaried worker:
annual salary = $57,800
semi-monthly pay periods
Gross Paycheck = $2,408.33
(semi-monthly = 2 paychecks per month = 24 paychecks per year)
What is a person's salary if they have a bi-weekly gross paycheck of $1,225?
What is a person's salary if they have a bi-weekly gross paycheck of $1,225?
Salary = $31,850
(Bi-weekly means every-other-week, which is 26 pays for the year: 1,225 x 26)
Fill in the blank:
Net pay is the result of subtracting the total of all __________________ from the gross pay.
Fill in the blank:
Net pay is the result of subtracting the total of all __________________ from the gross pay.
Deductions
Calculate the net paycheck amount for this individual:
gross pay: $825.60
federal withholding: $98.84
social security: $49.82
medicare: $11.65
maine: $43.00
health and dental insurance: $22.00
retirement plan: 41.28
Calculate the net paycheck amount for this individual:
gross pay: $825.60
federal withholding: $98.84
social security: $49.82
medicare: $11.65
maine: $43.00
health and dental insurance: $22.00
retirement plan: 41.28
Net Paycheck = $559.01
(Simply subtract the total of the deductions from the gross pay amount)
What is the net paycheck amount for this individual?
salary = $67.480
semi-monthly paychecks
per pay period:
federal withholding: $422.91
social security: $171.72
medicare: $40.16
maine withholding: $160.00
health and dental insurance: $42.00
retirement plan: $281.17
What is the net paycheck amount for this individual?
salary = $67.480
semi-monthly paychecks
per pay period:
federal withholding: $422.91
social security: $171.72
medicare: $40.16
maine withholding: $160.00
health and dental insurance: $42.00
retirement plan: $281.17
Net Paycheck = $1,693.71
(Divide the annual salary by 24 for 'semi-monthly' pay periods, then subtract the total of all deductions)
What percentage of this employee's gross pay is lost to deductions?
What percentage of this employee's gross pay is lost to deductions?
Percentage of gross pay lost to deductions = 32.29 percent
(Percent = part / whole = deductions / gross = $266.59 / $825.60 = 0.3229 = 32.29 percent)
Bobby earns a salary of $67.480 per year as an engineer at the shipyard. He had a net paycheck of $1,693.71 before adjusting his number of allowances on teh w-4. After adjusting the number of allowances on the w-4 form, his net paycheck went to $1,749.38.
Did bobby increase or decrease his number of allowances on the w-4 form?
Bobby earns a salary of $67.480 per year as an engineer at the shipyard. He had a net paycheck of $1,693.71 before adjusting his number of allowances on teh w-4. After adjusting the number of allowances on the w-4 form, his net paycheck went to $1,749.38.
Did bobby increase or decrease his number of allowances on the w-4 form?
Bobby increased his number of allowances by one.
(An increase in allowances results in lower taxes withheld and a higher net paycheck. Keep in mind that this will also change the tax owed or tax refunded amount when tax return time comes around...)
What does FICA stand for?
What does FICA stand for?
Federal
Insurance
Contributions
Act
What are the tax rates for both Social Security and Medicare?
What are the tax rates for both Social Security and Medicare?
Social security = 6.20 percent
Medicare = 1.45 percent
Calculate both the Social Security and Medicare withholding amounts for this person's paycheck:
gross pay = $1,280
health and dental insurance = $75
retirement plan contribution = $128
United Way contribution = $10
Calculate both the Social Security and Medicare withholding amounts for this person's paycheck:
gross pay = $1,280
health and dental insurance = $75
retirement plan contribution = $128
United Way contribution = $10
Social Security = $74.41
Medicare = $17.47
(The only deductions that are exempt from FICA are health and/or dental insurance premiums and/or contributions to a health savings account)
True or False: The employer matches the amount that the employee has withheld for both Social Security and Medicare taxes.
True or False: The employer matches the amount that the employee has withheld for both Social Security and Medicare taxes.
True!
The amount that you see withheld from your paycheck for both Social Security and Medicare is actually just half of what gets sent away to the federal government for FICA. The employer must also contribute, penny for penny, what the employee contributed!
What age must a person be today in order to be eligible for Social Security retirement benefits in the United States? How about Medicare benefits?
What age must a person be today in order to be eligible for Social Security retirement benefits in the United States? How about Medicare benefits?
Social Security = age 62
Medicare = age 65
This 9-digit number identifies the bank where the checking account is held. It can always be found at the bottom of each check alongside the account number and check number.
This 9-digit number identifies the bank where the checking account is held. It can always be found at the bottom of each check alongside the account number and check number.
Routing Number
Write a check to your high school for $36.28 to pay for a laptop repair bill.
Write a check to your high school for $36.28 to pay for a laptop repair bill.
Call your teacher over to verify that you've written a valid check!
What could a person do if they wanted to avoid going to the bank with their paycheck every Friday afternoon when they got paid?
What could a person do if they wanted to avoid going to the bank with their paycheck every Friday afternoon when they got paid?
Arrange for DIRECT DEPOSIT of their paycheck!
Fill out a checking account ledger for the following 4 transactions:
Starting Balance: $942.87
1. 11/1/16: Check #224 - $750 for this month's rent
2. 11/3/16: Debit card - $84.25 for groceries
3. 11/5/16: PAYDAY - $1,142.25 direct deposit
4. 11/6/16: Debit card - $32.82 for gas
Fill out a checking account ledger for the following 4 transactions:
Starting Balance: $942.87
1. 11/1/16: Check #224 - $750 for this month's rent
2. 11/3/16: Debit card - $84.25 for groceries
3. 11/5/16: PAYDAY - $1,142.25 direct deposit
4. 11/6/16: Debit card - $32.82 for gas
Ending Balance = $1,218.05
(Did you enter '224' under the 'Check #' column?)
Write a check to the Wounded Warrior Project for a $50 donation, enter the transaction in a ledger, then add these 3 transactions to the ledger:
Starting Balance: $144.28
1. 10/16/16: Debit card - $36.65 for gas
2. 10/18/16: PAYDAY - $962.28
3. 10/9/16: Debit card - online payment of $111.44 to Z-Mobile
Write a check to the Wounded Warrior Project for a $50 donation, enter the transaction in a ledger, then add these 3 transactions to the ledger:
Starting Balance: $144.28
1. 10/16/16: Debit card - $36.65 for gas
2. 10/18/16: PAYDAY - $962.28
3. 10/9/16: Debit card - online payment of $111.44 to Z-Mobile
Call your teacher over to verify your check to the Wounded Warrior Project.
Your ending balance should be $908.47
This type of card is linked directly to a checking account and can be used at ATMs, Points of Sale/Service, and even for online purchases.
This type of card is linked directly to a checking account and can be used at ATMs, Points of Sale/Service, and even for online purchases.
Debit Card
An employee chooses a number of these when filling out their W-4 form for their employer. The purpose is to reduce the employee's taxable income for the purpose of income tax withholdings from each paycheck.
An employee chooses a number of these when filling out their W-4 form for their employer. The purpose is to reduce the employee's taxable income for the purpose of income tax withholdings from each paycheck.
Allowances
This statutory deduction is part of a program put in place in the 1930's under the Federal Insurance Contributions Act. It's purpose is to provide a modest source of income for retirement. It can also provide income for those who are survivors of someone who contributed to this program, or for those who have become disabled.
This statutory deduction is part of a program put in place in the 1930's under the Federal Insurance Contributions Act. It's purpose is to provide a modest source of income for retirement. It can also provide income for those who are survivors of someone who contributed to this program, or for those who have become disabled.
Social Security
This is an agreed-upon amount of money for an agreed-upon job for a year.
This is an agreed-upon amount of money for an agreed-upon job for a year.
Salary
This is what heppens when you try to make a purchase for more than your available balance in your checking account.
This is what heppens when you try to make a purchase for more than your available balance in your checking account.
Overdraft
Social Security sometimes shows up on a pay stub as 'FICA,' which we know stands for Federal Insurance Contributions Act. On some paychecks, however, the Social Security withholding shows up as 'OASDI.' What does OASDI stand for?
Social Security sometimes shows up on a pay stub as 'FICA,' which we know stands for Federal Insurance Contributions Act. On some paychecks, however, the Social Security withholding shows up as 'OASDI.' What does OASDI stand for?
Old Age
Survivor
Disability
Insurance
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