Paychecks: Using Your Money Wisely Chapter 2. Calculating Earnings  Wage- is a dollar amount per hour that you get paid for doing work  Gross Pay- total.

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Presentation transcript:

Paychecks: Using Your Money Wisely Chapter 2

Calculating Earnings  Wage- is a dollar amount per hour that you get paid for doing work  Gross Pay- total amount of earnings before deductions  Gross pay is also known as gross earnings or gross wages  Gross Pay= Hourly Wage x Hours Worked  Example 2-1

 Time Card- record of time you start work, time you leave and breaks you take  40 hours a week is considered a standard work week  Overtime- amount paid for working additional hours beyond the standard workweek.  OT= hourly wage is 1.5 x hourly rate  Hourly Wage x Overtime Hourly Wage  Example 2-2,2-3 & 2-4

 Salary- set amount of money paid to someone in exchange for work  Can be paid weekly, biweekly(every other week), semimonthly(twice a month), or once a month  Examples 2-5 & 2-6  Deductions- amounts subtracted from your gross pay

 Federal income taxes- taxes on income that are collected by the U.S. Government  Allowances- conditions for which you qualify, that will lower the amount of income taxes withheld from your pay  Social Security- social insurance program ran by US  Medicare- National health insurance program ran by US  State Income taxes- taxes on income collected by a state government  Local Income taxes- taxes paid to a local government, county or city  Gross Pay x Tax Rate= Tax  Example 2-10 &2-11

 Net pay- gross pay minus all deductions  Gross pay-total deductions = net pay  Example 2-12  Direct Deposit- transfer of money to checking or savings account  Insurance- protection against loss that may occur in certain  Retirement account- savings account specifically set up for your later years  Contributions- or donating to charity or other causes