M ANAGING YOUR P ERSONAL F INANCES U NIT 2: C ALCULATING G ROSS P AY, D EDUCTIONS AND N ET P AY.

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Presentation transcript:

M ANAGING YOUR P ERSONAL F INANCES U NIT 2: C ALCULATING G ROSS P AY, D EDUCTIONS AND N ET P AY

D O N OW : Round the following number to tenths, hundredths, and thousands: tenthshundredthsthousands

D AILY G OALS I will be able to correctly round numbers to the tenths, hundredths and thousands. I will be able to calculate net pay.

Rounding Practice See Rounding Practice Handout

Salaried Employees are not on a Time Clock … These employees get an annual salary that is paid: * Monthly (12 times per year) * Twice a Month (24 times per year) * BiWeekly (26 times per year)

Calculating Deductions Practice calculating deductions on a gross salary of $ Use the following payroll tax deductions: FICA – 6.2% 6.2 % x $100 = _______ Medicare – 1.45%1.45% x $100 = _______ FIT – 10%10% x $100 = _______ SIT – 1.5%1.5% x $100 =_______ What is your total deductions? _______

Calculating Deductions Practice calculating deductions on a gross salary of $ Use the following payroll tax deductions: FICA – 6.2% 6.2 % x $100 = _______ Medicare – 1.45%1.45% x $100 = _______ FIT – 10%10% x $100 = _______ SIT – 1.5%1.5% x $100 =_______ What is your total deductions? _______ Important Note: All deductions should add up to about 20% of your gross salary.  Calculation check: Is your answer for total deductions about 20% of your gross salary?

Calculating Deductions Practice calculating deductions on a gross salary of $ Use the following payroll tax deductions: FICA – 6.2% 6.2 % x $500 = _______ Medicare – 1.45%1.45% x $500 = _______ FIT – 10%10% x $500 = _______ SIT – 1.5%1.5% x $500 =_______ What is your total deductions? _______

Calculating Deductions Practice calculating deductions on a gross salary of $ Use the following payroll tax deductions: FICA – 6.2% 6.2 % x $500 = _______ Medicare – 1.45%1.45% x $500 = _______ FIT – 10%10% x $500 = _______ SIT – 1.5%1.5% x $500 =_______ What is your total deductions? _______  Calculation check: Is your answer for total deduction 20% of your gross salary?

Basic Net Pay Formula: (for hourly employees) Net Pay = Gross Pay – Deductions N = G - D

Basic Net Pay Formula: (for hourly employees) Practice: Calculate Neve’s Net Pay. Neve’s Gross is $200 and Deductions are $40? Net Pay =Gross Pay -Deductions

Basic Net Pay Formula: (for hourly employees) Practice: Calculate Eric’s Net Pay. Neve’s Gross is $300 and Deductions are $60? Net Pay =Gross Pay -Deductions

Basic Net Pay Formula (N=G-D): Practice: Calculate Justin’s Net Pay. Justin’s Gross is $250 with the following Deductions: Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay

Basic Net Pay Formula (N=G-D): Practice: Calculate Justin’s Net Pay. Justin’s Gross is $250 with the following Deductions: Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay  Calculation check: Is your answer for total deduction 20% of your gross salary? Deductions+ Gross Pay x 20%

Basic Net Pay Formula (N=G-D): Practice: Calculate Ryan’s Net Pay. Ryan’s Gross salary is $550 with the following Deductions: Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay

Basic Net Pay Formula (N=G-D): Practice: Calculate Ryan’s Net Pay. Ryan’s Gross salary is $550 with the following Deductions: Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay  Calculation check: Is your answer for total deduction 20% of your gross salary? Deductions+ Gross Pay x 20%

Putting it all together-1 Practice: Calculate George’s Gross Pay (he worked 18 hours and his hourly pay is $10 per hour ). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) (Regular Hours)

Putting it all together-1 Practice: Calculate George’s Gross Pay (his hourly pay is $10 per hour and he worked 18 hours). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) (Regular Hours)  Calculation check: Is your answer for total deduction 20% of your gross salary? Deductions+ Gross Pay x 20%

Putting it all together-2 Practice: Calculate Ron’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of overtime (at 1.5 hourly rate). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) Regular Hours Overtime Hours Total Gross Pay

Putting it all together-2 Practice: Calculate Ron’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of overtime (at 1.5 hourly rate). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) Regular Hours Overtime Hours Total Gross Pay  Calculation check: Is your answer for total deduction 20% of your gross salary? Deductions+ Gross Pay x 20%

Putting it all together-3 Practice: Calculate Larry’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of holiday time (at 2x hourly rate). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) Regular Hours Overtime Hours Total Gross Pay

Putting it all together-3 Practice: Calculate Larry’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of holiday time (at 2x hourly rate). Then, calculate Deductions (with the percentages provided); Then, calculate Net Pay. Gross Pay FICA6.20% Medicare1.45% FIT10.00% SIT1.50% Total Deductions Net Pay Gross Pay =# Work HoursWage ($)Pay ($) Regular Hours Overtime Hours Total Gross Pay  Calculation check: Is your answer for total deduction 20% of your gross salary? Deductions+ Gross Pay x 20%

Calculating Net Pay Practice See Payroll Practice #2

E XIT T ICKET : Explain why it is important to recognize that deductions between 20-30% may be taken out of your pay.