1. Take Charge Today
Introductory Level
Paycheck Basics

2. For many it’s the first paycheck.
What’s the best part about having your first job?
Before payment occurs there are
steps to complete.
What do you plan to do with your
first big paycheck?

3. W-4 Must be completed To receive a paycheck, an employee must:
Complete a Form W-4
Employee’s Withholding Allowance Certificate
Determines the amount of money withheld for taxes

4. Required charges of citizens by local, state and federal governments
What are taxes?
What are examples of goods and services that are paid for with taxes?
Provide public goods and services.

5. What forms of ID do you have to
I-9 must be completed
Completing a Form I-9
Used to prove citizenship
Must provide at least 2 of the following
passport
driver’s license
U.S. military card
Social Security card
birth certificate
What forms of ID do you have to
complete the I-9?

6. W-2 is completed at the end of the tax year
Form W-2 (Wage and Tax Statement)
States the amount of money earned and taxes paid throughout the previous year
Used to file income taxes by April 15th
Individuals may be exempt from filing federal withholdings if they make less than a certain amount per year
How many businesses in our community
advertise to help with this process?

7. Methods for Paying Employees
Paycheck
Paper check with stub
Least secure payment method because the employee is responsible for handling the paycheck
Direct Deposit
Employers directly deposit employee’s paycheck into the authorized employee’s bank account
Payroll Card
A payroll card electronically carries the balance of the employee’s net income

8. Touch and feel the payment Employee controls when it is deposited
Paycheck Pros and Cons
Pros
Cons
Touch and feel the payment
Employee controls when it is deposited
Least secure method
Employee responsible to get it to the bank
Fees may apply if a person is unbanked

9. Direct Deposit Pros and Cons
No direct handling of check
Won’t get lost
Employee knows exactly when money will be in account
No direct handling of the check
Must check online for accuracy of paycheck stub

10. Payroll Card Pros and Cons
No direct handling of check
Wages automatically loaded on card
Works like a debit card
Card could be lost
Fees may be charged

11. Reading a Paycheck Stub
Personal Information:
Name, SSN or Employee Number & Address

12. Personal Information -Employee’s full name, address, and social security number or employee identification number
Pay Period -The length of time for which an employee’s wages are calculated
Most businesses pay employees either weekly, bi-weekly, or monthly

13. Reading a Paycheck Stub
Pay Period:
The length of time for which an employee earns wages

14. Reading a Paycheck Stub
Gross Income:
The total amount of money earned before payroll withholdings

15. What is the gross income if an employee works 15 hours
If a person earns an hourly wage, gross income is calculated by multiplying the number of hours worked by the wage
Number of hours worked
Wage
What is the gross income if an employee works 15 hours
at an hourly
wage of $9.50?
Gross Income

16. Reading a Paycheck Stub
Payroll Deductions:
Items deducted from gross pay. Typically around 30%.
Typically include:
Federal withholding
State withholding
FICA

17. Reading a Paycheck Stub
Deductions this pay period
Accumulated deductions for the year

18. Payroll Deductions
Withholding Tax – The amount required by law for employers to withhold from earned wages to pay taxes
FICA-Federal Insurance Contribution Act
Fed OASDI/EE (Federal Old Age Survivors Disability Insurance Employee Employment Tax) or Social Security - helps provide retirement income for the elderly and pays disability benefits
Fed MED/EE (Federal Medicare Employee Employment Tax) or Medicare - health care program for the elderly and disabled

19. Reading a Paycheck Stub
Net Income:
The check amount that is often referred to as the take home pay.

20. The amount left after all payroll deductions have been taken from gross income
Net Income
Often referred to as “take home” pay

21. Net Income Payroll Withholdings Net Income $180.00 –
Gross Income $180.00
Payroll Withholdings:
Federal Withholding Tax $14.10
State Withholding Tax $5.45
FICA $13.77
What is her Net Income?
Payroll Withholdings
Net Income
$ –
($ $ $13.77)
= $146.68

22. Review each pay period
It is important to review each paycheck stub to identify any possible mistakes!
If a mistake is found, contact the employer immediately

23. Questions?