1. No bellwork today – get out a pencil for the quiz
Getting Paid
No bellwork today – get out a pencil for the quiz

2. Big Bang Theory http://youtu.be/rhfaHOj0HZ4?t=12s
Sheldon is stuck on the solution to a complex physics problem. Sheldon seeks a number of alternative approaches to change his thinking and free the mental block, including working with Penny at the Cheesecake factory.

3. Do you feel Sheldon is being fair to Penny?
What type of employee benefits do you believe Penny has as a part of her job?
What employee benefits does Sheldon have?
Are there employee benefits that both Penny and Sheldon’s employers are required to provide?
Is Penny self employed or employed by an employer?
Do Sheldon and Penny have to pay the same income and payroll taxes even though they have very different types of jobs?

4. What are the two primary sources of employment?
Self-employed
Paid and pay taxes differently
Employed by an employer
Do you know anyone who is self-employed?
What sources of employment do your family members have?

5. Would you rather be paid a salary or hourly wage?
Salary vs. Hourly
Salary
Set amount of money
Not dependent on the specific number of hours worked
Example: $30,000/year
Hourly wage
Earn a specific rate for every hour worked
Example: $16.00/hour
Minimum wage – Federal and state
Some employees are paid an hourly wage and earn a specific rate for every hour worked. The federal government sets a minimum hourly way. (7.25), and employers are required to pay employees at least that amount per hour. Some states have their own minimum wage that is higher than the federal minimum wage. Other employees are paid a salary which is a set amount of money and not dependent on the specific number of hours worked.
Would you rather be paid a salary or hourly wage? Why?
Would you rather be paid a salary or hourly wage?

6. What methods do employers use to pay employees?
Paper paycheck
Direct deposit
Payroll card
Complete pros and cons

7. Paper Paycheck and Direct Deposit
Access funds by cashing or depositing a check
Direct deposit
Wages deposited directly to depository institution account

8. Payroll Card What method of payment would be best for you?
Functions similar to a debit card, except not linked to employee’s personal account
Wages electronically loaded each payday
Fees are common
Fees are common with payroll cards. It is important to examine all fees before using.
What method of payment would be best for you?

9. Payroll deductions
Gross income - amount of money earned before payroll taxes
Deductions
Net income – take home pay
Employers make several deductions to the wages employees earn. Deductions are taken from the employee’s gross income. When all deductions are taken out of gross income, the employee is left with net income. Some deductions are mandatory and taken from everyone’s wages and some deductions are optional and depend on the employer and employee
Mandatory
Optional

10. What are the mandatory income and payroll tax deductions?
Federal income tax
State income tax
Payroll
Social Security
Medicare

11. Allowances Number of allowances claimed Federal income tax deducted
Federal income tax liability
Individuals may change their Form W-4 at any time

12. What are optional payroll deductions?
Employee benefits – products or services that add extra value for employees beyond wages earned
Employee’s portion of the cost is deducted
Insurance
Retirement plans
Flexible spending accounts
Do you know what types of optional deductions may be deducted from an employee’s paycheck? Employee benefits may be deducted from an employee’s paycheck. Employee benefits may be deducted from wages if the employer offers benefits. If the employee opts into these benefits, the employee’s portion of the cost will be deducted from gross income. Even though these benefits cost the employee, the employee will typically pay much less than privately purchasing the same benefit.
Employee will typically pay much less than privately purchasing that same benefit.

13. How Employers Further Support Employees
Workers’ compensation
Helps pay medical expenses if you are injured on the job
Unemployment insurance
You can receive this if you lose your job due to no fault of your own
Employers are required to purchase workers’ compensation and unemployment insurance for each employee at no cost to them. Workers’ compensation and unemployment insurance are designed to protect the employee.
Both required at no cost to the employee

14. How Employers Further Support Employees
Paid or unpaid days for illness, personal, holidays
Match contributions to Social Security and Medicare
Employers may also support employees by offering a set amount of paid or unpaid days for illness, personal use, and holidays. The specific amount of days and amount of pay for each type of day depends on the employer. Employers match emplyee’s contributions to Social Security and Medicare, therefore helping to fund those programs.

15. What is a pay stub? Pay stub - outlines the deductions made to wages
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Pay stub - outlines the deductions made to wages
Depending on the company and payment method, employees may or may not receive a pay stub for every pay period. However, employees may raquest a pay stub or another type of earnings statement that summarizes the deductions taken from wages at any time. The pay stub format will vary across employers. Ask participants why it is important to review their pay stub? Review stub on sheet.
Why is it important to review your pay stub?

16. Pay Stub Name Standard Employee Information Address
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Standard Employee Information
Name
Address
Identification number
Fill in as we go through.

17. Pay Period Pay Stub Regular schedule that employers pay employees
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Pay Period
Regular schedule that employers pay employees
Weekly, bi-weekly, bi-monthly, or monthly
Why is the pay period different than the pay date?

18. Pay Stub Gross income Net income Current Year-to-date (YTD)
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Gross income
Net income
Current
Year-to-date (YTD)
Amount this pay period
Amount from January 1 to last day of current pay period

19. Earnings Pay Stub How wages were calculated May show current and YTD
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Earnings
How wages were calculated
May show current and YTD

20. What are examples of deductions?
Pay Stub
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Deductions
All deductions from gross income
What are examples of deductions?

21. Pay Stub What contributions are included?
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Amount the employer has contributed to various employee benefits and other contributions.
Employer contributions
What contributions are included?

22. Employee Leave Balance
Pay Stub
Employee Information
Pay Date: 6/11/2013
Name
Identification Number
Address
Pay Rate
Pay Period
Joe Beakens
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
Type
Rate
Hours
Regular
160
Overtime
Deductions
Personal Deduction
Employer Contribution
Federal income tax
$249.40
State income tax 
$100.00
Social Security and Medicare
$183.60
Retirement plan
$144.00
Health insurance
$400.00
Workers’ compensation
$13.80
Unemployment insurance
$6.26
Employee Leave Balances
Beginning balance current
Beginning balance YTD
Used Current
Used YTD
Ending Balance
Personal 10 15 5
Sick
Employee Leave Balance
Summary of the employee’s leave time
Sick
Vacation
Holidays

23. Can an employer pay employees cash?
Ensure employer is deducting income and payroll taxes from wages paid in cash
If taxes are not deducted from your wages you:
Are not managing your tax liability
Will be responsible for tracking the amount of money made and paying those taxes
Are probably not receiving worker’s compensation and unemployment insurance coverage
Yes, some employers may want to pay employees in cash rather than by a paper paycheck, direct deposit, or payroll card. However, if presented the with option to be paid in cash, they should ensure that the emplyer is deducting income and payroll taxes from the wages.
Consult a tax professional to determine if you should pay taxes on cash earned.

24. Summary
Employers make deductions to wages (outlined on the pay stub)
Deducting payroll and income taxes on a “pay as you go” system helps manage tax liability
Being employed provides additional benefits beyond wages earned
Employers are required to pay unemployment insurance and worker’s compensation
Employers may offer employee benefits that save the employee money
Fill out paystub activity, taboo, assignment