warm up joe’s employer pays 60% of his annual medical insurance premiums. the total annual cost...

Warm up

• Joe’s employer pays 60% of his annual medical insurance premiums. The total annual cost per employee is $5,000. Joe is paid bi-weekly. What dollar amount should be deducted from Joe’s bi-weekly paycheck?

• 100% - 60% = 40%• 5000 x .40 = $2000• 2000 / 26 = $76.92

net pay

The amount of money left after your employer subtracts all tax withholdings and personal deductions from your gross pay (also called net income or take-home pay).

Lesson Objective Calculate net pay per pay period.

Content Vocabulary

net pay

Net Pay

Pay Period 6/11/2004-7/11/2004

$1,502.10$250.35Totals

$503.46$117.72$636.00$244.92$0.00$0.00

$106.00$40.82$83.91$19.62$0.00$0.00

Federal WithholdingState WithholdingFed OASDI/ EE or Social SecurityFed MED/ EE or MedicareMedical401K

$1,353.33

Year-to-dateCurrentDeductionsPay Type-Gross Pay

Employee Address293 Michael GroveBillings, MT 59102

Check Amount$1,102.98

Check #164

SSN201-92-4856

EmployeeBeakens, Joe

On-The-Go

Pay Period 6/11/2004-7/11/2004

$1,502.10$250.35Totals

$503.46$117.72$636.00$244.92$0.00$0.00

$106.00$40.82$83.91$19.62$0.00$0.00

Federal WithholdingState WithholdingFed OASDI/ EE or Social SecurityFed MED/ EE or MedicareMedical401K

$1,353.33

Year-to-dateCurrentDeductionsPay Type-Gross Pay

Employee Address293 Michael GroveBillings, MT 59102

Check Amount$1,102.98

Check #164

SSN201-92-4856

EmployeeBeakens, Joe

On-The-Go

Alisha’s gross weekly salary is $600. She is married and claims 3 allowances. Her state tax is 3.07% of her gross pay. Her local tax is 1% of her gross pay. She pays $28.40 for medical insurance and $5.00 for charity. Find the total deductions from her paycheck and her net pay.

Find each deduction, the total, the net pay, and then get teacher initials.

• Federal: $26• Social Security: 600 x 6.2% = 37.20• Medicare: 600 x 1.45% = 8.70• State tax: 600 x 3.07% = 18.42• Local tax: 600 x 1% = 6.00• Medical insurance: 28.40• Charity: 5.00• Total deductions: $129.72• Net Pay: $600 - $129.72 = $470.28

Application and Analysis:

In the following slides you will be given the opportunity to prove

your ability to handle this chapter’s material

$14.00

$15.00

$19.00

$20.00

1. Tonya Westin’s gross pay for the week is $357.89. She is married and claims no allowances. Use the table on page A4 in the text. What amount will be withheld for FIT?

5. Kyle Gruber’s gross pay this month is $5,432.50. His earnings to date for the year total $12,300.75. How much does his employer deduct from his paycheck this month for Social Security?

$336.82

$356.59

$511.85

$575.60

5432.50 x .062 = 336.815

6. Sui Chun’s gross pay last week was $2,350. Her earnings to date for the year are $43,500. How much did her employer deduct from her paycheck last week for Medicare?

$34.08

$47.00

$58.75

$65.90

2,350 x .0145 = 34.075

7. Tamara Matta’s annual group insurance costs $5,800, and her company pays 75% of the cost. How much does Tamara pay monthly for insurance?

$100.90

$120.83

$280.50

$362.50

5,800 x .25 / 12 = 120.8333

9. Erika Morley’s gross weekly salary is $825.75. She is married with no dependents. The following deductions are made each week: $31.00 for federal tax; 6.2% for Social Security and 1.45% for Medicare; $42.50 for medical insurance. The state tax rate is 1.5% of gross. What is Erika’s net pay?

$543.96

$550.76

$612.09

$676.69

Closure:

What is the difference between Net Pay and Gross pay?What is the difference between Net pay and take home pay?

Notes:

Tomorrow’s objective: review for test 2

Following day’s objective: evaluation and assessment of chapter two’s material