Working and Earning Earning Statements

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    24-Feb-2016

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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 - PowerPoint PPT Presentation

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Working and Earning Earning Statements

Working and EarningEarning Statements

Key IdeasEmployment provides a means of creating personal incomeEmployee earning statements include information about. gross wages, benefits, taxes and other deductions

Overview InformationEmployees are able to monitor their salaries through the information provided on their earning statementsprovided 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 deductionsnet income is the total amount of money that an employee actually gets after deductionsNet income is also called Take Home Pay

Gross is usually reflected in a general salary or hourly figure Pete earns a salary of $45,000/yearSarah earns $13.50/hourNeither or these employees takes home that full amount

Deductions

Define.money that is taken out of an employees gross pay for different purposesExampleshealth insurance (medical, dental, vision)retirement contributionsannuities/loan paymentsgarnishment (for unpaid child support, owed back taxes, etc.)taxes - federal, state and localSocial 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 $45,000Health 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 $45,000Health Ins ($100 per pay)$2,400401 k (10% of gross) $4,500Social Securtity (7% of gross)$3,150Fed.Income Tax (10% of gross) $4,500State Income Tax (2% of gross) $900Local Income Tax (1% of gross) $450Total Deductions $15900Net Income =

$29,100I HAVE NOT EATEN YET! = 64.6 % of Gross IncomePay Check Deductions Federal Income Tax720State Income Tax 220City Income Tax 140Medicare 50STRS700Health 120Dental 6Vision 1Union15403 B200Savings 120------------------------------------------------------------$2292

Not taxed on this income earned

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