Independent Living October 12, 2015 Payroll Taxes.
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Transcript of Independent Living October 12, 2015 Payroll Taxes.
Independent Living October 12, 2015
Payroll Taxes
https://www.youtube.com/watch?v=whf3S85q0bk
First: A video from “FRIENDS”
Gross Pay vs Net PayExplain why someone earns $100 for work,
but receives check for less than $100?
Gross Pay:
Gross pay is the amount of money you earn before taxes
Net Pay:
Net pay is the amount of money you are owed after taxes are withdrawnGross Pay - Other Withholdings - Taxes = Net Pay
***Other Withholdings will always be deducted before taxes***
Social Security Tax includes:◦ Retirement benefits◦ Benefits for dependents ◦ Benefits for disabled and
parents
AKA: Federal Insurance Contributions Act (FICA)
Using Payroll TaxesTax Type Tax Rate
Social Security (FICA) 6.20%
Medicare 1.45%
Total Payroll Taxes 7.65%
Using Payroll TaxesTax Type Tax Rate
Social Security (FICA) 6.20%
Medicare 1.45%
Total Payroll Taxes 7.65%
Medicare Taxes includes:◦ Provides benefits for certain
individuals when they reach age 65
An Employee earns $1,000 in a pay period.Using the tax table, what
are the payroll taxes?◦ FICA = $62.00◦ Medicare = $14.50
How much is the employee’s Net Pay?◦ 1,000 – 76.50 = $923.50
Example:Tax Type Tax Rate
Social Security (FICA) 6.20%
Medicare 1.45%
Total Payroll Taxes 7.65%
Income TaxEmployers calculate
income tax for you◦ Use W-4 forms
Income tax depends on multiple things◦ What state you live in◦ Income bracket you fall in
A single employee earns $4,000 in a pay period.Using the tax tables, what
are the taxes being paid?◦ FICA = $248◦ Medicare = $58◦ Federal Income Tax= $400
How much is the employee’s Net Pay?◦ $4,000-$706= $3,294
Example:Tax Type Tax Rate
Social Security (FICA) 6.20%
Medicare 1.45%
Total Payroll Taxes 7.65%
Income Tax Provides:Income taxes help pay for:
◦National defense, vets, and foreign affairs◦Social Programs◦Physical, human, and community development
◦Law enforcement◦Interest on national debt
Video Explanationhttps://www.youtube.com/watch?
v=f_c_OsHlCL8
TaskComplete the assignment numbers 1-10On all math problems, YOU MUST SHOW ALL
WORKDue tomorrow beginning of class!