Understanding Pay, Benefits, and Incentives Money Management

Gross Pay, Deductions, and Net Pay Gross Pay: total amount you earn before any deductions are subtracted. Hourly Wages $7.50 * 40 hours = $300.00 Regular Pay Overtime $7.50 * 1.5 (represents time and a half) = $11.25 $11.25 (overtime pay) * 5 = $56.25

Regular Pay plus Overtime Pay = Gross Pay $7.50 * 40 hours Regular Pay = $300.00 $11.25 (overtime pay) * 5 hours = $56.25 Gross Pay $356.25 Go to Page 120 in the Personal Finances Textbook

Deductions Social security tax Federal income tax State income tax (not all states have income tax) Michigan Other optional deductions 401 K (investment) Flex spending Insurance Union dues

Net Pay Net pay: Pay after deductions are taken out of your gross pay. Regular wages or salary + Overtime = gross pay Gross pay – deductions = net pay

What is the difference between an hourly employee and a salaried employee? Salaried employees do not receive additional pay for overtime work. Gross pay will be the same every pay period. 52 weeks in a year/2 weeks per period = 26 pay periods $24,000/26 pay periods = $923.08 per pay check

Employee Withholding Sheet Page 122 textbook At this time some of you will be on the computers completing Virtual Business Personal Finance Finding a Job simulation

Benefits and Incentives Profit Sharing – allows employees to receive a portion of the companies profits at the end of the corporate year Paid Vacations and Holidays Employee services Retail may give you %age off clothes Child Care Sick Pay

More Benefits and Incentives Leaves of Absence Insurance Bonuses and stock options Pension Plans Travel Expenses

Categorize Benefits ESSENTIAL IMPORTANT NICE TO HAVE

Solve Problems and Explore Issues Page 140 complete Problems 1-5