1. Understanding Your Paystub

2. Deductions Anything subtracted from the pay you earned Types – Federal taxes – State taxes – Local taxes (county) – Social security (FICA) – Medicare (FICA) – Health benefit premiums – Savings/Retirement contributions – Union dues

3. Earnings Gross pay – total amount of money you earned during a pay period Taxable Income – Amount of money you earned that can be taxed – Your gross pay MINUS any tax-free (or “pre-tax”) deductions Savings/Retirement contributions Health savings accounts – Tax-free (pre-tax) deductions lower your taxable income – How do tax-free deductions work?

4. Tax-Free (pre-tax) Deductions Without using tax-free deductions Gross pay = $1,000 Federal tax rate (10% of income) = $100 Retirement contribution = $100 You get paid = $800 Using tax-free deductions Gross pay = $1,000 Retirement contribution (pre- tax) = $100 Taxable Income = $900 Federal tax rate (10% of income) = $90 You get paid = $810

5. Totals Net Pay – the amount of pay that is left after deductions are taken out of your gross pay – AKA: Take home pay Year-To-Date Totals: the total amount of earnings and deductions broken down by categories

6. Quick Review 1.The total amount of money you earned in a pay period is known as your ______________ 2.Any money taken out of your gross pay is known as a _______________ 3.The amount of your gross pay which can be taxed is known as your __________________ 4.Taxes are a type of ________________ 5.The total amount of money you end up taking home after deductions is known as your _______________ Gross pay deduction Taxable income deduction Net pay