1. September 7, 2011 Objective: Students will identify how to calculate gross pay and net pay.

2. Discussion What’s the most important part of working? Does anyone know the term Gross Pay? What about Net Pay?

3. Terms Gross Pay: The total of an employee’s regular pay including allowances, overtime pay, commissions, and bonuses, and any other amounts, before deductions are made. Net Pay: The portion of a salary or wages that an employee actually gets (take home) after paying all deductions and taxes. Tax: Compulsory monetary contribution imposed by the government on activities of enjoyment, expenditure, income, occupation, privilege, property, etc. on individuals and organizations.

4. Gross vs. Net Pay Many businesses, forms, applications will want to know you GROSS PAY. In addition, your employer will tell you how much you will be paid as a GROSS salary figure but most people are more concerned with their NET salary… so how can you calculate your NET salary???

5. Gross Pay Gross Pay: $31,200 a year = $600 a week = $15 an hour… how to calculate? Other known numbers are: generally 40 hours per week 52 weeks per year 2080 (40 x 52) (if the 40 hours per week varies then the rest of the calculations must also vary)

6. Try these calculations in your notebook So try to calculate… $16 an hour… how much per year? $60,000 a year… how much per hour? $500 a week… how much per hour? $100,000 a year… how much per week? $20 an hour… how much per week? $300 a week… how much per year? $16 an hour, working 50 hours a week… how much per year?

7. Answers $16 an hour x 2080 = $33,280 per year $60,000 a year / 2080 = $28.84 per hour $500 a week / 40 = $12.50 per hour $100,000 a year / 52= $1,923 per week $20 an hour x 40 = $800 per week $300 a week x 52 = $15,600 per year $16 an hour, working 50 hours a week = 16 x 40 = 640 (16 x 1.5) x 10 = 240 why? (640 + 240) x 52 = $45,760 per year

8. Calculating Net Pay… not so easy What’s removed from your Gross Pay before you get Net Pay, we’ll discuss more tomorrow! Income Tax: based on a government schedule based on Gross Pay and the number of family members claimed. Social Security Tax: 6.2% of Gross Pay Medicare Tax: 1.45% of Gross Pay Other Optional Deductions can include… Health Insurance, Retirement, Charitable Donations, Pre-tax spending accounts, etc. Online calculator: http://www.paycheckcity.com/cokronos/netpaycalculator. asp

9. Conclusion What was our objective for today? Homework… for tomorrow complete the worksheet on calculating Gross Pay.