1. FL Chapter 2 Study Guide KEY…
Two types of employees:
Hourly
Salaried
Lowest rate of pay:
Minimum Wage
Overtime is 1.5 times regular pay for over 40 hours
What type of employee does not keep time cards?

2. 5. List required payroll deductions
Federal income tax
state income tax (most states but not all)
social security tax
medicare tax
6. optional (voluntary) payroll deductions
retirement (401K, 403B, pension)
disability insurance
medical insurance contribution
union dues
life insurance

3. 7. Forms of payment other than wages or salary: BENEFITS 8
7. Forms of payment other than wages or salary: BENEFITS 8. Benefits for full-time workers: Pay without work (vacations, holidays, sick pay) Education reimbursement Perks Retirement plans (company matching) Stock option plans Medical/Dental Insurance
Pay without work refers to times when an employee who is not working will still be paid. Examples: Paid vacations, holidays and sick days
K is a Retirement plan. - NOT taxed until you withdraw it.
It is an OPTIONAL deduction from your paycheck.

4. 11. Self-employed person who takes risk of owning business:
ENTREPRENEUR
12. Lifestyle Business: Your own hobbies and intends to keep it small and work it him/herself
Venture Business: Intends to expand and become a corporation
Self employment:
Advantages: Disadvantages:
owner makes all decisions must take risks (risky)
sets the hours of the business long, hard work at first
keeps all profits money tight at first
Money received from sources other than actively working a job:
UNEARNED INCOME

5. 15. Earned Income
Unearned Income
Interest
Disability
Dividends
Social Security Benefits
Unemployment Benefits
Pension (Retirement )
Wages (regular pay and OT)
Salaries
Tips
Commissions

6. 16. Perks:
Office with a view, company car, parking space, coffee station
17. Benefits of paying taxes:
public roads and highways
police protection
public schools
national and local parks
national security – armed forces
18. Disability Insurance: replaces lost income when illness or injury prevents an employee from working. It is an OPTIONAL deduction.

7. 19. a. Regular Pay: 40 x $10 = $400
Overtime Pay: 5 x $15 = $75
Total Gross Pay: $475
b. Weekly salary: $39,000/ 52 weeks = $750/ week Gross Pay
c. Gross pay per week = $750
750 x 10% = $75 federal income tax
750 x 6.2% = $46.50 social security tax
750 x 1.45% = $10.88 medicare tax
Total Deductions = $132.38
750 – = $ Net Pay per week

8. Quiz your neighbor on the key terms- 3rd page on your study guide
Ch. 2 Quiz Today
5 minute opener:
Quiz your neighbor on the key terms- 3rd page on your study guide
Then: Quiz Review Game .

9. 19. Self-employment Advantages and Disadvantages
can make the decisions
can set your own hours
can keep all the profits
if fails, invested money is lost
must take risks (risky)
hard to get credit
initial startup is hard work
money tight at first
Critical Listening Skills
Evaluate the information
Consider only important or relevant info
Make decision on what is accurate and useful
Focus and eliminated distractions
Face the speaker, make eye contact, nod and show interest
Mentally summarize main points