Working and Earning Earning Statements Key Ideas Employment provides a means of creating personal...
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Transcript of Working and Earning Earning Statements Key Ideas Employment provides a means of creating personal...
Working and EarningEarning Statements
• Key Ideas• Employment provides a means of creating
personal income• Employee earning statements include
information about……………….• gross wages, benefits, taxes and other
deductions
• Overview Information• Employees are able to monitor their salaries
through the information provided on their earning statements
• provided each time an employee is paid (usually on a bi-weekly or monthly basis)
• includes information about hours worked, gross vs. net income, deductions, etc.
Gross vs. Net Income
• “gross” income is……..• the total amount of money an individual
makes before deductions• “net” income is………• the total amount of money that an employee
actually gets after deductions• Net income is also called…• “Take Home Pay”
• Gross is usually reflected in a general salary or hourly figure –Pete earns a salary of $45,000/year– Sarah earns $13.50/hour–Neither or these employees “takes home”
that full amount
Deductions• Define….• money that is taken out of an employees gross
pay for different purposes• Examples……– health insurance (medical, dental, vision)– retirement contributions– annuities/loan payments– garnishment (for unpaid child support, owed back
taxes, etc.)– taxes - federal, state and local
• Social Security, federal income, state income, local income
• Example: Pete earns a salary of $45,000/year and gets paid every 2 weeks. Then, money is deducted for
• health insurance ($100/pay)• 401k (10% of gross)• Social Security (7% of gross) • federal income tax (20% of gross)• state income (4% of gross) • local income taxes (2% of gross)
Deductions Deduction Amount Gross Income $45,000
Health Ins ($100 per pay)
401 k (10% of gross)
Social Securtity (7% of gross)
Fed.Income Tax (20% of gross)
State Income Tax (4% of gross) Local Income Tax (2% of gross) Total Deductions
Deductions Deduction Amount Gross Income $45,000
Health Ins ($100 per pay) $2,400
401 k (10% of gross) $4,500
Social Securtity (7% of gross)
$3,150
Fed.Income Tax (10% of gross)
$4,500
State Income Tax (2% of gross)
$900
Local Income Tax (1% of gross)
$450
Total Deductions $15900
Net Income =$29,100
I HAVE NOT EATEN YET!
= 64.6 % of Gross Income
• Pay Check Deductions • Federal Income Tax 720• State Income Tax 220• City Income Tax 140• Medicare 50• STRS 700• Health 120• Dental 6• Vision 1• Union 15• 403 B 200• Savings 120• ------------------------------------------------------------• $2292
Not taxed on this income earned