1. NOTE: To change the image on this slide, select the picture and delete it. Then click the Pictures icon in the placeholder to insert your own image. Getting Paid Advanced Level

2. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Payroll deductions Gross income amount of money earned before payroll taxes Deductions Net income take home pay MandatoryOptional

3. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What are the five main types of taxes? Income Payroll Property Sales Excise Withheld from wages Paid at the time of purchase

4. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Why are income and payroll taxes deducted from wages? By paying income & payroll taxes with every paycheck you earn, this helps manage your personal tax liability on an ongoing basis (your total tax bill) Paycheck #1 Payroll deduction Paycheck #2 Payroll deduction Paycheck #3 Payroll deduction Beginning of year And so on, until the end of year – total tax liability due

5. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What are the mandatory income and payroll tax deductions? Income Federal income tax State income tax Payroll Social Security Medicare

6. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Federal Income Tax Largest required deduction Amount of money earned Information on Form W-4 Amount deducted How do you benefit from paying federal income taxes?

7. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What is the IRS W-4 form? Completed before you begin working for an employer (Remember: W4 before you work) Choose the number of allowances Rule of thumb = may claim an allowance for every dependent (but not required) Number of allowances determines the percentage of pay that will be deducted for federal income taxes You may change your W4 at any time 7

8. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona About Allowances... The LOWER the number of allowances you claim, the MORE taxes are withheld. (Claiming 0 = highest tax rate) The HIGHER the number of allowances you claim, the LESS taxes are withheld. 8

9. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona State Income Tax Not all states have state income tax Tax rate varies between states Does your state have state income tax?

10. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What is Social Security? Provides Tax deducted from wages Income for: o Retirees o People with profound disability o Children who have lost a parent o A person with children who has experienced the death of a spouse 6.2% Up to an annual maximum (2016 = $118,500) Paid by each worker and matched by employer

11. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What is Medicare? Provides Tax deducted from wages Helps pay for health care for individuals 65 and older 1.45% Limit: None Paid by each worker and matched by each employer

12. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What are optional payroll deductions? Employee benefits – add value for employees beyond wages Employee’s portion of the cost is deducted Insurance Retirement plans Flexible spending accounts Employee will typically pay much less than privately purchasing that same benefit.

13. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What is a pay stub? Pay stub - outlines the deductions made to wages Why is it important to review your pay stub? Employee InformationPay Date: 6/11/2013 Name Identification Number AddressPay Rate Pay Period Joe Beakens00112233 293 Michael Grove $15.00 5/1 – 5/31/2013 Summary Gross Income Total Personal Deductions Net Income Current$2,400.00$747.00$1,653.00 YTD$12,000.00$3,735.00$8,265.00 Earnings TypeRateHoursCurrentYTD Regular$15.00160$2,400.00$12,000.00 Overtime0000 Deductions TypePersonal DeductionEmployer Contribution Federal income tax$249.400 State income tax $100.000 Social Security and Medicare$183.60 Retirement plan$144.00 Health insurance$100.00$400.00 Workers’ compensation 0$13.80 Unemployment insurance0$6.26 Employee Leave Balances Type Beginning balance current Beginning balance YTD Used Current Used YTD Ending Balance Personal10150510 Sick55005

14. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Pay Stub Gross income = pay before deductions Net income = pay after deductions (take-home pay) CurrentYear-to-date (YTD) Amount this pay period Amount from January 1 to last day of current pay period Employee InformationPay Date: 6/11/2013 Name Identification Number AddressPay Rate Pay Period Joe Beakens00112233 293 Michael Grove $15.00 5/1 – 5/31/2013 Summary Gross Income Total Personal Deductions Net Income Current$2,400.00$747.00$1,653.00 YTD$12,000.00$3,735.00$8,265.00 Earnings TypeRateHoursCurrentYTD Regular$15.00160$2,400.00$12,000.00 Overtime0000 Deductions TypePersonal DeductionEmployer Contribution Federal income tax$249.400 State income tax $100.000 Social Security and Medicare$183.60 Retirement plan$144.00 Health insurance$100.00$400.00 Workers’ compensation 0$13.80 Unemployment insurance0$6.26 Employee Leave Balances Type Beginning balance current Beginning balance YTD Used Current Used YTD Ending Balance Personal10150510 Sick55005

15. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Pay Stub Earnings How wages were calculated May show current and YTD Employee InformationPay Date: 6/11/2013 Name Identification Number AddressPay Rate Pay Period Joe Beakens00112233 293 Michael Grove $15.00 5/1 – 5/31/2013 Summary Gross Income Total Personal Deductions Net Income Current$2,400.00$747.00$1,653.00 YTD$12,000.00$3,735.00$8,265.00 Earnings TypeRateHoursCurrentYTD Regular$15.00160$2,400.00$12,000.00 Overtime0000 Deductions TypePersonal DeductionEmployer Contribution Federal income tax$249.400 State income tax $100.000 Social Security and Medicare$183.60 Retirement plan$144.00 Health insurance$100.00$400.00 Workers’ compensation 0$13.80 Unemployment insurance0$6.26 Employee Leave Balances Type Beginning balance current Beginning balance YTD Used Current Used YTD Ending Balance Personal10150510 Sick55005

16. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Pay Stub Deductions All deductions from gross income What are examples of deductions? Employee InformationPay Date: 6/11/2013 Name Identification Number AddressPay Rate Pay Period Joe Beakens00112233 293 Michael Grove $15.00 5/1 – 5/31/2013 Summary Gross Income Total Personal Deductions Net Income Current$2,400.00$747.00$1,653.00 YTD$12,000.00$3,735.00$8,265.00 Earnings TypeRateHoursCurrentYTD Regular$15.00160$2,400.00$12,000.00 Overtime0000 Deductions TypePersonal DeductionEmployer Contribution Federal income tax$249.400 State income tax $100.000 Social Security and Medicare$183.60 Retirement plan$144.00 Health insurance$100.00$400.00 Workers’ compensation 0$13.80 Unemployment insurance0$6.26 Employee Leave Balances Type Beginning balance current Beginning balance YTD Used Current Used YTD Ending Balance Personal10150510 Sick55005

17. 2.3.9.G1 © Take Charge Today –April 2014 – Getting Paid– Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Pay Stub Amount the employer has contributed to various employee benefits and other contributions. Employer contributions What contributions are included? Employee InformationPay Date: 6/11/2013 Name Identification Number AddressPay Rate Pay Period Joe Beakens00112233 293 Michael Grove $15.00 5/1 – 5/31/2013 Summary Gross Income Total Personal Deductions Net Income Current$2,400.00$747.00$1,653.00 YTD$12,000.00$3,735.00$8,265.00 Earnings TypeRateHoursCurrentYTD Regular$15.00160$2,400.00$12,000.00 Overtime0000 Deductions TypePersonal DeductionEmployer Contribution Federal income tax$249.400 State income tax $100.000 Social Security and Medicare$183.60 Retirement plan$144.00 Health insurance$100.00$400.00 Workers’ compensation 0$13.80 Unemployment insurance0$6.26 Employee Leave Balances Type Beginning balance current Beginning balance YTD Used Current Used YTD Ending Balance Personal10150510 Sick55005