1. Chapter 8 Income and Taxes
Objectives:
Types of income
Regulations affecting pay
Examples of benefits
Employment classifications and effect on pay

2. males vs. females earnings

3. males vs. females earnings

4. 8.1 Types of Pay Salary: ex: $45,000 a year Wages: ex: $10/hour
Piecework: ex: $12.00 per basket
Commission ex: 10% of sales
some earn 100% commission, sometime base pay + ___% commission.

5. 8.1 Types of Pay Salary: ex: $45,000 a year Wages: ex: $10/hour
Ex:Management positions, skilled workers
Wages: ex: $10/hour
ex:hourly workers, may be lower skilled
Piecework: ex: $12.00 per basket
Ex: artists
Commission ex: 10% of sales
some earn 100% commission, sometime base pay + ___% commission.

6. 8.1 Define Types of Pay Pros: Cons:
Salary: consistent pay long hours may qualify for overtime pay
Wages: over time pay fewer hours less pay
Piecework: incentive to produce low performance, low/no pay
Commission:performance incentive low performance, low/no pay

8. Which is better?
$15.00 per hour or $30,000/ year?
Calculate.

9. Answer: $15.00 x 40 hrs per week= $600/week
$600/week x 52 weeks = $31,200
$15.00/hour = $31,200 vs. $30,000

10. Tips and Bonuses
Do you pay taxes on tips and bonuses?

11. Tips and Bonuses Do you pay taxes on tips and bonuses? Yes.
IL: Tipped employees earn $4.95 per hour (employers may claim credit for tips, up to 40% of wage[21]).

12. Fair Labor Standards Act
Same work, same pay.
Prevent discrimination
Fair hourly wages
Minimum wage IL $8.25
Sub-minimum wage: under 20, dev. Disabled, or full time students.
IL Employers may pay anyone under the age of 18 fifty cents less.

13. Overtime Over 40 hours/week 1.5 x hourly rate
Salary employees excluded.
Calculate gross pay for 43 hour week
$9.50/hr

14. New Overtime ruling effective 12/16

15. Other benefits that may be offered through employer: “Fringe Benefits”
Health, dental, vision insurance plans
Savings/retirement plans
Paid holidays
Sick leave, bereavement
Pay for additional education
Discounts
Ex: Wesclin teachers
13 sick days/year
3 personal days

16. American Paid Vacation Time & Sick Time:
There is not a federal law requiring paid sick days in the United States.
The U.S. remains the only industrialized country in the world that has no legally mandated annual leave.
In every country included except Canada and Japan (and the U.S., which averages 13 days/per year), workers get at least 20 paid vacation days. In France and Finland, they get 30 – an entire month off, paid, every year.

17. US has NO required Paid Maternity/Family Leave:

18. Employment classifications
Full-time: 35+ hours/week
Qualify for other company benefits.
Part-time: under 35 hrs/wk. Most do not qualify for benefits.
Temps: Short term assignments. No benefits.
Hired through temp agency, cheaper for employers.
Contract: Hired for specific period to complete project.
No company benefits.

19. 8.2 Understanding paychecks
How would you like to get paid?
Weekly
Bi-weekly (2 weeks)
Monthly
Direct Deposit- check goes directly into your specified bank account.
*receive money faster. No trip to bank.

20. What’s on a paystub? Employee identification (Social Security #)
Pay period
Earnings: hours x rate of pay
YTD= year to date
T/P= this pay period

21. Where does all my money go??
Gross Pay: total amount of money earned.
Net Pay: (“take home pay”) Amount of pay AFTER taxes and other deductions are taken out.

22. Look at your paystubs… How did your Net Pay compare to your Gross Pay
Look at your paystubs… How did your Net Pay compare to your Gross Pay? Record answers on paystub:
1) What percentage of your paycheck did you actually get to keep? Divide net by gross amount = ____%
Did anyone pick a state with no state tax?
2) Estimate about how long are you working in order to just pay your tax deductions??

23. What else may be deducted from your paycheck?
Health Insurance
Life insurance
Dental insurance
Vision insurance
Retirement plans i.e. 401K, pensions
Medical savings accounts

24. Who is “FICA”?!
Social Security (FICA): Pays retirement, survivors, disability benefits.
Medicare (FICA): Helps pay medical expenses for those that qualify-
“Federal Insurance Contributions Act”

25. Other Taxes:
Federal & State Taxes: Help pay for schools, roads, Parks, Law enforcement, etc.

26. Should you pay higher tax rates if you make more $?
What tax bracket would you be in as a single person?

27. Is being “Paid under the Table” a good idea?

28. Concerns of “Paid under the table”
not offering you any of the benefits to which you might be entitled,
you’re probably not covered for purposes of worker’s compensation or unemployment.
You’re definitely not paying in to Social Security.
No Proof of income- Can’t gets loans, credit.

29. What President started income taxes? Why?

30. What President started income taxes? Why?
To help fund the
Civil War, 1863.

31. Ruled Income Tax Unconstitutional
1913 Woodrow Wilson’s term,
16th Amendment allowed Gov’t to collect income taxes.
1930’s FDR increased taxes to help pay for SOCIAL SECURITY.

32. references