1. Money Management Chapter Six Notes Employee Pay and Benefits
_________________________________ is the total pay before any deductions are made! The calculation for gross pay with less than 40 hours worked is:
Gross Pay = ___________________________________________
_________________________________ is defined as hours worked beyond the regular hours. A standard work week is forty hours.
According to the Fair Labor Standards Act overtime is ______________________ your regular rate of pay.
Overtime Pay = _______________________________________
FOR EXAMPLE, a person may have worked 45 hours. Their gross pay would be calculated as follows:
40 hours X $4.50 per hour = ____________
5 hours X (4.50 *1.5) = ____________
Gross pay = $ $33.75 OR ____________
Some employees are paid a ______________________ INSTEAD of being paid by the hour.
Typically salaried employees either have a _____________________________ or an ________________________________.
If they have a monthly salary it is usually divided by four and paid each week or by two and paid biweekly.
If they have a yearly salary it is usually divided by 26 and paid every other week.
For example: (page 101).
$71,080 / 26 = $2, every two weeks
Most salaried employees _______________________________________________________ for working more than 40 hours in a week. Some do though... Usually at an agreed upon overtime rate.
Amounts subtracted from your gross pay are known as ___________________________.
Some deductions are required by law: Ex: Social Security, Federal & State Income Tax.
Others are optional and you may elect one or more of them: purchase of savings bonds, contributions to a retirement plan & charitable contributions.
Employers have to keep VERY detailed records of wages earned and deductions collected.
Employees must receive a detailed list of all deductions withheld from their paychecks.
____________________________ – The amount left when all the deductions are taken out of your gross pay.
Regular Wages/Salary + Overtime = Gross Pay
______________________________ = Net Pay
Tax Withholdings for Federal and State Income Tax are determined from ______________________________________________.
The more allowances a person claims on his/her W-4, the less the employer will withhold for their income tax, therefore the more the employee will have in take home pay.
Tax withholdings for Social Security can change over time. Right now it is calculated by multiplying your ___________________________________ .

2. Money Management Chapter Six Notes Employee Pay and Benefits
________________________________ are company provided supplements to income.
Some benefits are require by law such as unemployment compensation, worker’s compensation and Social Security.
In order to attract high quality employees, many employers offer special additional benefits.
Typical benefits are __________________________________________________________ __________________________________________________________________________.
________________________________ – a plan that allows employees to receive a portion of the company’s profits. The more money the company makes, the more the company has to share with it’s employees. This can lead to a very motivated workforce.
_______________________________________ – Most businesses provide employees with a set amount of paid vacation time (which means that while you are on vacation you are paid as usual). The average is two to three weeks of paid vacation per year.
Most full-time employees also receive pay for official holidays: Typically include Labor Day, Memorial Day, Thanksgiving, New Year’s Day.
_______________________________________ or “_________________” are the extras that companies offer in order to improve employee morale and working conditions.
Many employers offer free or discounted merchandise to employees. Other perks may include free parking, day-care centers and reimbursement for education costs.
____________________________________ – many businesses provide an allowance for sick days. It is customary to receive anywhere from 3-10 days.
________________________________________ – Some employers will allow you to leave your job, without pay, for certain reasons, with a guarantee that you can have your job back at a later time. (Reasons include having a kid, sickness or death in the family etc...)
One of the biggest and most important benefits is _____________________________!
___________________________________ – Typically the plans require a ____________________________. Once that amount is paid the insurance plan will pay anywhere from % of medical expenses.
____________________________________ – pays a cash benefit to a designated person, called a beneficiary, if the insured person dies. The purpose is to cover lost wages from that provider. Typical policies range from $50,000 to $100,000.
_____________________________________ – Plans differ. Typically dental plans cover up to a specified amount per year, per family member. Some cover braces, others don’t. Vision insurance also varies, most cover eye exams and lenses once every couple of years.
_______________________ may be handed out based on the quality of work done.
_______________________ give employees, usually executives, the right to buy a set number of shares of the company’s stock at a fixed price. The employee gains as the stocks go up.
____________________________________ – some employers provide retirement plans such as a pension or help you set up a retirement savings plan, like a 401(k). This means that you can still receive monthly checks when you are retired!
We will go into MUCH greater detail on retirement plans later this semester! Many of these optional benefits are of GREAT VALUE to employees.
As we’ve discussed in class, benefits can easily add up to 30% to your total compensation package! When you are out shopping for your job, don’t forget to weigh in the job benefits!