1. Pay Checks

2.  On every pay check there are always a lot of different numbers that are grouped with letters or acronyms.  There is a difference between what you make in total, known as earned or gross income and what you take- home, known as net income pay.

3.  In almost all cases, the net pay is less then the gross amount.  Generally speaking, when money is taken out of a pay check it is called a deduction.

4.  There are two different kinds of deductions or categories:  Taxes  Benefits

5.  Taxes are monies paid to the federal, state, or local governments.  They are better known as federal income tax, state income tax and local taxes.

6.  FICA: Federal Insurance Contributions Act. This money pays for social security, disability insurance and hospital insurance.

7.  Federal Income tax pays for programs run by the federal government.  For example: all government officials salaries, government agencies and departments, the defense budget, foreign aid, national highways, like route 95, etc.

8.  State income taxes pay for programs run by each state in the country.  For example: salaries of state officials, state agencies and department, state police, state highways, public education, etc.

9.  Local taxes pay for program run by local governments.  For example: salaries of local officials, local roads, local police, trash removal, etc.

10.  A second form of deductions are called benefits.  Benefit deductions can include things like: health and dental coverage, retirement savings, holiday clubs, union dues, and investments.