Part 1: Earning Statements. Working and Earning Earning Statements Key Ideas Employee earning statements include information about………………. gross wages,

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Part 1: Earning Statements

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Presentation transcript:

Part 1: Earning Statements

Working and Earning Earning Statements Key Ideas Employee earning statements include information about………………. gross wages, benefits, taxes and other deductions Gross vs. Net – define? Take home pay

Deductions Define…. money that is taken out of an employees gross pay for different purposes

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 Other 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

DeductionsDeduction AmountGross 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

DeductionsDeduction AmountGross Income $45,000 Health Ins ($100 per pay)$2, 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 Tax720 State Income Tax 220 City Income Tax 140 Medicare 50 STRS700 Health 120 Dental 6 Vision 1 Union B200 Credit Union $2292 Not taxed on this income earned