1

The Shrinking Paycheck

Consumer Math 2012-2013

2

Overview

• Gross Pay• Taxes• Deductions• Net Pay• Examples/Calculations

3

4

Gross Pay

• Salary– Usually ____ hours per week (Full-time)– Get the job done (no overtime)– Commission– Time cards/sheets– Flex-time

• Hourly– Overtime definition:– Overtime = Hourly Rate * _____

• Piecework

5

Types of Taxes• Federal Taxes

– http://www.irs.gov/pub/irs-pdf/p15.pdf– F.I.C.A. – Federal Insurance Contributions Act

• Social Security & Medicare• http://www.ssa.gov/oact/progdata/taxRates.html

• State Taxes– S.U.I. – State Unemployment Insurance– W.F./S.W.F. – Work Force Development– F.L.I. – Family Leave Insurance

• http://lwd.dol.state.nj.us/labor/employer/ea/rates/ea2012.html– T.D.I. – Temporary Disability Insurance– http://www.state.nj.us/treasury/taxation/pdf/current/njtaxratesch.pdf

6

Calculations For Taxes (2012)• Taxes Come out of Earned Income

Earned Income = Gross Pay - ______________• Rates & Examples Assume Single, 0 Exemptions• Federal – Follow Charts

– http://www.irs.gov/pub/irs-pdf/p15.pdf– F.I.C.A.

• Social Security (4.2% - pending 6.2%)• Medicare (1.45%)

• State – Follow Charts (2011)– Max: $30,300 Worth of Salary

• S.U.I. – (0.3825%)• F.L.I. – (0.08%)• T.D.I. – (0.2%)

– W.F.D./S.W.F.D. – (0.0425%)– http://www.state.nj.us/treasury/taxation/pdf/current/njtaxratesch.pdf

7

Federal Taxes

8

Federal Taxes

9

State Taxes

10

Deductions

• Health Insurance Premiums– Medical, Dental, Eyecare

• Life Insurance Premiums• Retirement Plan contributions (401k Plan)• Employee Stock Purchase Plans– ESPP and ESOP

• Meals, Uniforms, Union Dues, & Other Job Related Expenses

11

12