Group Health Insurance Section 2.5

Lots of places of businesses offer some sort of group insurance to employees. One can purchase group insurance for a lower cost than individual insurance. Business pays some or all, and the employee must pay the balance.

𝐸𝑚𝑝𝑙𝑜𝑦𝑒 𝑒 ′ 𝑠 𝑆ℎ𝑎𝑟𝑒=𝐴𝑛𝑛𝑢𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡∗𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒 𝑃𝑒𝑟𝑐𝑒𝑛𝑡 𝐷𝑒𝑑𝑢𝑐𝑡𝑖𝑜𝑛𝑠 𝑝𝑒𝑟 𝑝𝑎𝑦 𝑝𝑒𝑟𝑖𝑜𝑑= 𝑇𝑜𝑡𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡 𝑃𝑎𝑖𝑑 𝑏𝑦 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑃𝑎𝑦 𝑃𝑒𝑟𝑖𝑜𝑑𝑠

Step 1: Find the percent paid by the employee 100%–𝑃𝑒𝑟𝑐𝑒𝑛𝑡 𝐶𝑜𝑚𝑝𝑎𝑛𝑦 𝑃𝑎𝑦𝑠 Step 2; Find total amount paid by employee 𝐴𝑛𝑛𝑢𝑎𝑙 𝐴𝑚𝑜𝑢𝑛𝑡∗𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑒 𝑃𝑒𝑟𝑐𝑒𝑛𝑡

Step 1; Find percent paid by employee Paul Newman is a teacher. He has medical coverage through the group medical plan, provided by the school. The annual cost is $8,500. The school pays 75% of the cost. How much does he pay annually for medical insurance? What is the deduction per pay period when he is paid monthly? Step 1; Find percent paid by employee Step 2; Find total amount paid by employee Step 2; Find the deduction per pay period

Statement of Earnings Section 2.6

Now that we know what gets taken out of a paycheck we can figure the take home pay. The take home pay or net pay is the amount the employee gets after all the deductions are made.

𝑁𝑒𝑡 𝑃𝑎𝑦=𝐺𝑟𝑜𝑠𝑠 𝑃𝑎𝑦−𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑑𝑢𝑐𝑡𝑖𝑜𝑛𝑠 There will be a statement of earnings attached to the paystub. It is a good idea to check the math when you get a paycheck to insure a mistake was not made.

Step 1: Find total deductions 𝐴𝑑𝑑 𝑢𝑝 𝑎𝑙𝑙 𝑑𝑒𝑑𝑢𝑐𝑡𝑖𝑜𝑛𝑠 Step 2; Find the net pay 𝐺𝑟𝑜𝑠𝑠 𝑃𝑎𝑦 −𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑑𝑢𝑐𝑡𝑖𝑜𝑛𝑠

Step 1; Find total deductions Suppose Paul’s monthly gross pay was $2,500. He is married and claims 3 allowances. The social security tax is 6.2%, Medicare is 1.45%, the state tax is 1.5%, he also pays $12.50 for medical insurance, and $3.00 to charity. What is his net pay? Step 1; Find total deductions Step 2; Find net pay

Ch.2: Net Income Read pg.126-129 Summarize your notes Homework