Unit 2Unit 2

Chapters 6, 8 & 9Chapters 6, 8 & 9

Chapter 7 is taxesChapter 7 is taxes Cover close to tax timeCover close to tax time 6, 8 & 9 will have more terms6, 8 & 9 will have more terms Will be responsible for these termsWill be responsible for these terms

Chapter 6Chapter 6

Employee Pay and benefitsEmployee Pay and benefits

What is employee pay?What is employee pay? What are different ways you can be What are different ways you can be

paid?paid?

Ways To Get PaidWays To Get Paid

Hourly WagesHourly Wages OvertimeOvertime Shift DifferentialShift Differential SalarySalary

– Bi weeklyBi weekly– MonthlyMonthly– AnnuallyAnnually

Piece workPiece work BonusBonus Merit PayMerit Pay Barter Barter CommissionCommission

Calculate Your PayCalculate Your Pay

You work in a department store. You earn You work in a department store. You earn $7.50 per hour plus 1% of all sales you $7.50 per hour plus 1% of all sales you make each pay period. You worked 80 make each pay period. You worked 80 hours and sold $200 per hour. What was hours and sold $200 per hour. What was your GROSS earnings?your GROSS earnings?– $200 sales/hr X 80 hours = $16,000$200 sales/hr X 80 hours = $16,000– $16,000 in sales X .01 (1%) = $160$16,000 in sales X .01 (1%) = $160– 80 hours X $7.50 = $60080 hours X $7.50 = $600

– Total pay = $160 + $600 = $760Total pay = $160 + $600 = $760– Annual pay = $720 X 50 = $37,500Annual pay = $720 X 50 = $37,500

Calculate Your PayCalculate Your Pay Now you calculateNow you calculate You work selling by phone. You earn You work selling by phone. You earn

$3.50 per hour plus 5% of all sales you $3.50 per hour plus 5% of all sales you make each pay period. You worked 80 make each pay period. You worked 80 hours and sold $100 per hour. What was hours and sold $100 per hour. What was your GROSS earnings?your GROSS earnings?– $100 sales/hr X 80 hours = $8,000$100 sales/hr X 80 hours = $8,000– $8,000 in sales X .05 (5%) = $400$8,000 in sales X .05 (5%) = $400– 80 hours X $3.50 = $28080 hours X $3.50 = $280

– Total pay = $280 + $400 = $680Total pay = $280 + $400 = $680– Annual pay = $680 X 50 = $34,000Annual pay = $680 X 50 = $34,000

Calculate Your PayCalculate Your Pay

You work selling a product. Your salary is You work selling a product. Your salary is $48,000 per year. You make a $48,000 per year. You make a commission of 2% of all sales. You sell commission of 2% of all sales. You sell about $2,000,000 per year. What was about $2,000,000 per year. What was your GROSS earnings for the year?your GROSS earnings for the year?– $2,000,000 in sales X .02 (2%) = $40,000$2,000,000 in sales X .02 (2%) = $40,000– Annual salary = $48,000Annual salary = $48,000

– Annual pay = $40,000 + $48,000 = $88,000Annual pay = $40,000 + $48,000 = $88,000– What is your bi weekly pay from your salary?What is your bi weekly pay from your salary?– What is your monthly commission? What is your monthly commission?

Calculate Your PayCalculate Your Pay

– What is your bi weekly pay from your What is your bi weekly pay from your salary?salary?

– What is your monthly commission?What is your monthly commission?

– Bi weekly $48,000 ÷ 26 = $1,846.15Bi weekly $48,000 ÷ 26 = $1,846.15

– Monthly $48,000 ÷ 12 = $4,000 Monthly $48,000 ÷ 12 = $4,000

Benefits & IncentivesBenefits & Incentives

Profit sharingProfit sharing Stock OptionsStock Options Paid VacationPaid Vacation HolidaysHolidays Employee ServicesEmployee Services Sick PaySick Pay Leave of AbsenceLeave of Absence FlextimeFlextime

Terms Chapter 6Terms Chapter 6

DeductionsDeductions Employee ServicesEmployee Services Fringe benefitsFringe benefits Gross payGross pay Net pay Net pay Collective BargainingCollective Bargaining

TermsTerms

SenioritySeniority StrikeStrike VestedVested

Benefits and IncentivesBenefits and Incentives

InsuranceInsurance– HealthHealth– LifeLife– DentalDental– VisionVision

Stock OptionsStock Options Pension Pension Retirement Savings PlansRetirement Savings Plans Travel ExpensesTravel Expenses

T/P/ST/P/S

What are some items on a pay check What are some items on a pay check you need to know about?you need to know about?

What is FICAWhat is FICA What is Medicare/MedicaidWhat is Medicare/Medicaid

Gross PayGross Pay DeductionsDeductions Net payNet pay

Income & The W-4Income & The W-4

Read p 17 to 18 in NEFE bookRead p 17 to 18 in NEFE book

Be able to answer all terms Be able to answer all terms highlighted in bluehighlighted in blue

The W - 4 FormThe W - 4 Form

Go to the IRS Web siteGo to the IRS Web site Look at a W-4 formLook at a W-4 form What is the purpose of the W-4?What is the purpose of the W-4?

The standard deduction for 2010 is The standard deduction for 2010 is – $5,700$5,700

If you make less, no fed taxesIf you make less, no fed taxes More, pay some federal taxesMore, pay some federal taxes

Decision – get $ each payDecision – get $ each pay– or as a bigger refundor as a bigger refund

Paycheck MistakesPaycheck Mistakes

Most occur when payroll is done in Most occur when payroll is done in househouse– Not by a payroll company like ADTNot by a payroll company like ADT

Common MistakesCommon Mistakes– Incorrect hours creditedIncorrect hours credited– Overtime payOvertime pay– Wrong taxesWrong taxes

TaxesTaxes

Name the payroll taxesName the payroll taxes– Federal income taxFederal income tax– State income taxState income tax– City or local income taxCity or local income tax– FICAFICA– Medicare/medicaidMedicare/medicaid– UI/DIUI/DI

Go to Go to www.irs.gov In the box to the right, type in In the box to the right, type in tax tax

tablestables Go to the first entry on list and clickGo to the first entry on list and click Filling out a W-4 form impacts Filling out a W-4 form impacts

deductionsdeductions

Other DeductionsOther Deductions

RetirementRetirement– 401K401K– 403B403B

MedicalMedical– StandardStandard– DentalDental– VisionVision– Life InsuranceLife Insurance

Union DuesUnion Dues

The Pay StubThe Pay Stub

TermsTerms

Incentive payIncentive pay Job rotationJob rotation Job sharingJob sharing LobbyingLobbying Professional organizationProfessional organization

Terms Chapter 8Terms Chapter 8

BudgetBudget

Budget activityBudget activity

NEFE BookNEFE Book

Read pgs 33 to 38Read pgs 33 to 38 Using the budget worksheet on my Using the budget worksheet on my

web site, answer the questionsweb site, answer the questions

TermsTerms

AssetsAssets BudgetBudget ContractContract CosignerCosigner Disposable IncomeDisposable Income Financial planFinancial plan

TermsTerms

Fixed expensesFixed expenses LiabilitiesLiabilities Variable ExpenseVariable Expense Negotiable instrumentNegotiable instrument Mutual assentMutual assent