Unit 2 Chapters 6, 8 & 9

 Chapter 7 is taxes  Cover close to tax time  6, 8 & 9 will have more terms  Will be responsible for these terms

Chapter 6  Employee Pay and benefits  What is employee pay?  What are different ways you can be paid?

Ways To Get Paid  Hourly Wages  Overtime  Shift Differential  Salary –Bi weekly –Monthly –Annually  Piece work  Bonus  Merit Pay  Barter  Commission

Calculate Your Pay  You work in a department store. You earn $7.50 per hour plus 1% of all sales you make each pay period. You worked 80 hours and sold $200 per hour. What was your GROSS earnings? –$200 sales/hr X 80 hours = $16,000 –$16,000 in sales X.01 (1%) = $160 –80 hours X $7.50 = $600 –Total pay = $160 + $600 = $760 –Annual pay = $720 X 50 = $37,500

Calculate Your Pay  Now you calculate  You work selling by phone. You earn $3.50 per hour plus 5% of all sales you make each pay period. You worked 80 hours and sold $100 per hour. What was your GROSS earnings? –$100 sales/hr X 80 hours = $8,000 –$8,000 in sales X.05 (5%) = $400 –80 hours X $3.50 = $280 –Total pay = $280 + $400 = $680 –Annual pay = $680 X 50 = $34,000

Calculate Your Pay  You work selling a product. Your salary is $48,000 per year. You make a commission of 2% of all sales. You sell about $2,000,000 per year. What was your GROSS earnings for the year? –$2,000,000 in sales X.02 (2%) = $40,000 –Annual salary = $48,000 –Annual pay = $40,000 + $48,000 = $88,000 –What is your bi weekly pay from your salary? –What is your monthly commission?

Calculate Your Pay –What is your bi weekly pay from your salary? –What is your monthly commission? –Bi weekly $48,000 ÷ 26 = $1, – Monthly $48,000 ÷ 12 = $4,000

Benefits & Incentives  Profit sharing  Stock Options  Paid Vacation  Holidays  Employee Services  Sick Pay  Leave of Absence  Flextime

Terms Chapter 6  Deductions  Employee Services  Fringe benefits  Gross pay  Net pay  Collective Bargaining

Collective Bargaining Activity  4 groups  2 are workers groups  2 are owners  Negotiate a salary raise

Terms  Seniority  Strike  Vested

Benefits and Incentives  Insurance –Health –Life –Dental –Vision  Stock Options  Pension  Retirement Savings Plans  Travel Expenses

T/P/S  What are some items on a pay check you need to know about?  What is FICA  What is Medicare/Medicaid

 Gross Pay  Deductions  Net pay

Income & The W-4  Read p 17 to 18 in NEFE book  Be able to answer all terms highlighted in blue

The W - 4 Form  Go to the IRS Web site  Look at a W-4 form  What is the purpose of the W-4?

 The standard deduction for 2010 is –$5,700  If you make less, no fed taxes  More, pay some federal taxes  Decision – get $ each pay – or as a bigger refund

Paycheck Mistakes  Most occur when payroll is done in house –Not by a payroll company like ADT  Common Mistakes –Incorrect hours credited –Overtime pay –Wrong taxes

Taxes  Name the payroll taxes –Federal income tax –State income tax –City or local income tax –FICA –Medicare/medicaid –UI/DI

 Go to  In the box to the right, type in tax tables  Go to the first entry on list and click  Filling out a W-4 form impacts deductions

Other Deductions  Retirement –401K –403B  Medical –Standard –Dental –Vision –Life Insurance  Union Dues

The Pay Stub

Terms  Incentive pay  Job rotation  Job sharing  Lobbying  Professional organization

Terms Chapter 8

Budget  Budget activity

NEFE Book  Read pgs 33 to 38  Using the budget worksheet on my web site, answer the questions

Terms  Assets  Budget  Contract  Cosigner  Disposable Income  Financial plan

Terms  Fixed expenses  Liabilities  Variable Expense  Negotiable instrument  Mutual assent