1. Part 1: Earning Statements

2. Working and Earning Earning Statements Key Ideas Employee earning statements include information about………………. gross wages, benefits, taxes and other deductions Gross vs. Net – define? Take home pay

3. Deductions Define…. money that is taken out of an employees gross pay for different purposes

4. Example: Pete earns a salary of $45,000/year and gets paid every 2 weeks. Then, money is deducted for health insurance ($100/pay) 401k (10% of gross) Social Security (7% of gross) federal income tax (20% of gross) state income (4% of gross) local income taxes (2% of gross)

5. Deductions Other Examples: – health insurance (medical, dental, vision) – retirement contributions – annuities/loan payments – garnishment (for unpaid child support, owed back taxes, etc.) – taxes - federal, state and local Social Security, federal income, state income, local income

6. DeductionsDeduction AmountGross Income $45,000 Health Ins ($100 per pay) 401 k (10% of gross) Social Securtity (7% of gross) Fed.Income Tax (20% of gross) State Income Tax (4% of gross) Local Income Tax (2% of gross) Total Deductions

7. DeductionsDeduction AmountGross Income $45,000 Health Ins ($100 per pay)$2,400 401 k (10% of gross)$4,500 Social Securtity (7% of gross) $3,150 Fed.Income Tax (10% of gross) $4,500 State Income Tax (2% of gross) $900 Local Income Tax (1% of gross) $450 Total Deductions$15900 Net Income = $29,100 I HAVE NOT EATEN YET! = 64.6 % of Gross Income

8. Pay Check Deductions Federal Income Tax720 State Income Tax 220 City Income Tax 140 Medicare 50 STRS700 Health 120 Dental 6 Vision 1 Union15 403 B200 Credit Union120 ------------------------------------------------------------ $2292 Not taxed on this income earned