statement of earnings pp. 128-132 2-6 section. click to edit master text styles second level third...
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Statement of Earnings pp. 128-1322-6SECTIONSECTION
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 2 of 17
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Section ObjectiveSection ObjectiveFigure out:
• net pay per pay period
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 3 of 17
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net pay (p. 128)
The amount you have left over after all tax withholdings and personal deductions have been subtracted from your paycheck.
Key Words to KnowKey Words to Know
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 4 of 17
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Net Pay = Gross Pay – Total Deductions
FormulaFormula
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 5 of 17
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Jack’s Jackpot p. 128Jack’s Jackpot p. 128
Describe your philosophy on money.
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 6 of 17
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Alysha Moore’s gross weekly salary is $600. She is married and claims 3 allowances. The Social Security tax is 6.2 percent. The Medicare tax is 1.45 percent. The state tax is 1.5 percent. Each week she pays $12.40 for medical insurance and $2.50 for charity.
Is Moore’s earnings statement correct?
Example 1Example 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 7 of 17
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Figure 2.4Figure 2.4
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 8 of 17
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Find the total deductions.
a. Federal withholding $35.00
b. Social Security: 6.2% of $600.00 37.20
c. Medicare: 1.45% of $600.00 8.70
d. State tax: 1.5% of $600.00 9.00
e. Medical insurance 12.00
f. Charity 2.50
Total $104.80
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 9 of 17
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Find the net pay.
Gross Pay – Total Deductions
$600.00 – $104.80 = $495.20
Her statement is correct.
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 10 of 17
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Find the deductions and the net pay. Social Security is 6.2 percent of the first $84,900. Medicare is 1.45 percent of all income.
Use the tax tables on pages 788-791 in your textbook for federal tax. Round to the nearest cent.
Practice 1Practice 1
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 11 of 17
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Pierre Lamont is married and claims 4 allowances. His gross weekly salary is $628. Each week he pays federal, Social Security, and Medicare taxes, as well as $28 for medical insurance and $12 for union dues.
What are his deductions and his net pay?
Practice 1 (cont.)Practice 1 (cont.)
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 12 of 17
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Federal: $29
Social Security: $38.94
Medicare: $9.11
Net pay: $510.95
Practice 1 AnswerPractice 1 Answer
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 13 of 17
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Find the deductions and the net pay. Social Security is 6.2 percent of the first $84,900. Medicare is 1.45 percent of all income.
Use the tax tables on pages 788-791 in your textbook for federal tax. Round to the nearest cent.
Practice 2Practice 2
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 14 of 17
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Michele Sawyer is single and claims 1 allowance. She earns $11.50 per hour as a pest controller and works 40 hours.
Deductions include federal income tax, Social Security, and Medicare.
Practice 2 (cont.)Practice 2 (cont.)
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 15 of 17
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State taxes are 4 percent of gross income, and local taxes are 2 percent of gross income. She pays $42.75 per week for medical insurance.
What are her deductions and net pay for the week?
Practice 2 (cont.)Practice 2 (cont.)
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Copyright © Glencoe/McGraw-Hill MBA, Section 2-6, Slide 16 of 17
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Federal: $48
Social Security: $28.52
Medicare: $6.67
State tax: $18.40
Local tax: $9.20
Medical insurance: $42.75
Net pay: $306.46
Practice 2 AnswerPractice 2 Answer
Statement of Earnings2-6END OF SECTIONEND OF SECTION