understanding paychecks where does your money go?
TRANSCRIPT
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Understanding Paychecks
Where Does Your Money Go?
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Pay Check Stub
Check Stub-the part of a paycheck that lists deductions from your salary
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Personal Information
Personal Information:• Name• Social Security Number• Address
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Pay Period
Pay Period– The length of time for which an employee’s wages
are calculated; most are weekly, bi-weekly, twice a month, or monthly
– The last day of the pay period is not always payday to allow a business to accurately compute wages
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Gross Pay
Gross Pay– The total amount of an employee’s earnings
BEFORE deductions are taken out• This is calculated by multiplying the number of
hours worked by the hourly rate
$1,353.33
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Net Pay
Net Pay– The amount of a paycheck AFTER all
deductions are taken out (sometimes referred to as take home pay)
$1,102.98
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Deductions
Deduction– The amount of money taken
from an employee’s gross pay for taxes, insurance, social security, and other benefits
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Required Deductions
Federal Withholding: taxes taken for federal fundingState Withholding: taxes taken for taxes for state fundingSocial Security: retirement/disability benefitsMedicare: health care program for elderly/disabled
Income Tax: the part of earnings that people must legally give to the government to pay for government services
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Optional Deductions
(Medical) Insurance: Can get insurance through employer401K: Personal retirement
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Current vs. Year to Date
Current: the amount paid for each deduction THIS pay periodYear-to-Date: the amount paid for each deduction so far THIS YEAR
$250.35
$1,502.10
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Pay Check Math
GROSS PAY: $1,533.33
TOTAL DEDUCATIONS: $250.35
NET PAY: $1,282.98