Working and Earning Earning Statements

Working and Earning Earning Statements

• Key Ideas
• Employment provides a means of creating personal income
• Employee earning statements include information about……………….
• gross wages, benefits, taxes and other deductions

Overview Information

• Overview Information
• Employees are able to monitor their salaries through the information provided on their earning statements
• provided each time an employee is paid (usually on a bi-weekly or monthly basis)
• includes information about hours worked, gross vs. net income, deductions, etc.

Gross vs. Net Income

• “gross” income is……..
• the total amount of money an individual makes before deductions
• “net” income is………
• the total amount of money that an employee actually gets after deductions
• Net income is also called…
• “Take Home Pay”

Gross is usually reflected in a general salary or hourly figure

• Gross is usually reflected in a general salary or hourly figure
• Pete earns a salary of $45,000/year
• Sarah earns $13.50/hour
• Neither or these employees “takes home” that full amount

Deductions

• Define….
• money that is taken out of an employees gross pay for different purposes
• 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

• 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)

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

• 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
• Savings 120
• ------------------------------------------------------------
• $2292

Not taxed on this income earned

THANK YOU FOR ATTENTION!

THANK YOU FOR ATTENTION!