Part 1: Earning Statements
Working and EarningEarning Statements
• Key Ideas• Employee earning statements include
information about……………….• gross wages, benefits, taxes and other
deductions• Gross vs. Net – define? • Take home pay
Deductions• Define….• money that is taken out of an employees gross
pay for different purposes
• Example: Pete earns a salary of $45,000/year and gets paid every 2 weeks. Then, money is deducted for
• health insurance ($100/pay)• 401k (10% of gross)• Social Security (7% of gross) • federal income tax (20% of gross)• state income (4% of gross) • local income taxes (2% of gross)
DeductionsOther Examples:– health insurance (medical, dental, vision)– retirement contributions– annuities/loan payments– garnishment (for unpaid child support, owed back
taxes, etc.)– taxes - federal, state and local• Social Security, federal income, state income, local
income
Deductions Deduction Amount Gross Income $45,000
Health Ins ($100 per pay)
401 k (10% of gross)
Social Securtity (7% of gross)
Fed.Income Tax (20% of gross)
State Income Tax (4% of gross) Local Income Tax (2% of gross) Total Deductions
Deductions Deduction Amount Gross Income $45,000
Health Ins ($100 per pay) $2,400
401 k (10% of gross) $4,500
Social Securtity (7% of gross)
$3,150
Fed.Income Tax (10% of gross)
$4,500
State Income Tax (2% of gross)
$900
Local Income Tax (1% of gross)
$450
Total Deductions $15900
Net Income =$29,100
I HAVE NOT EATEN YET!
= 64.6 % of Gross Income
• Pay Check Deductions • Federal Income Tax 720• State Income Tax 220• City Income Tax 140• Medicare 50• STRS 700• Health 120• Dental 6• Vision 1• Union 15• 403 B 200• Credit Union 120• ------------------------------------------------------------• $2292
Not taxed on this income earned