Planet Paycheck

Embed Size (px)

Text of Planet Paycheck

2.13.1.G1

Double the SalaryAn employee starting a new job has the option to choose how he is paid for the first twenty days of work. He works five days a week, for four full weeks. Make the best choice for the new employee after comparing the two options.Payment Option 1: For the first twenty days of work, the new employee will be paid $500 a day. Payment Option 2: The pay will be $0.01 for the first day. Each day the pay will double. So, it will be $0.02 the second day, $0.04 the third day, $0.08 the fourth day, etc. By the end of twenty days, how much money will the employee have made?

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Double the SalaryPayment Option 1: Payment Option 2:$ 0.01 Day 11 .02 Day 12 .04 Day 13 .08 Day 14 .16 Day 15 .32 Day 16 .64 Day 17 1.28 Day 18 2.56 Day 19 5.12 Day 20 Total: 10.24 20.48 40.96 81.92 163.84 327.68 655.36 1310.72 2621.44 5242.88 $10,485.75 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 $500.00 a day * 20 days = $10,000 Day 1

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

SolutionPayment Option 1: $500.00 a day * 20 days = $10,000.00 Payment Option 2: This is a better choice for the new employee as he will be making $10,485.75 This is $485.75 more than if he would have chosen Payment Option 1

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Family Economics & Financial Education

Planet PaycheckAn Earthlings Guide to Understanding Paychecks Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Planet Paycheck NavigationWelcome to Planet Paycheck! While visiting Planet Paycheck the vast world of paychecks will be explored!

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

First Job! Miss Patty Paycheck has just received her first paycheck from her new job! But, the paycheck amount seems a little lower than she had figured. How could that be?

Taxes Required charges of citizens by local, state, and federal governments Taxes are deducted from all employees paychecks Used to provide public goods and services Roads, police, schools, governmental agencies, fire and emergency services Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Starting a New JobTo receive a paycheck, an employee must: Complete a Form W-4 Employees Withholding Allowance Certificate Determines the amount of money withheld for taxes

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Starting a New JobComplete a Form I-9 Used to prove the identity of people and avoid hiring non United States citizens Must provide at least 2 of the following passport drivers license U.S. military card Social Security card birth certificate Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Starting A New JobForm W-2 (Wage and Tax Statement) States the amount of money earned and taxes paid throughout the previous year Used to file income taxes by April 15th Individuals may be exempt from filing federal withholdings if they make less than a certain amount per year

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Methods for Paying Employees1. Paycheck Paper check with stub Least secure payment method because the employee is responsible for handling the paycheck Direct Deposit Employers directly deposit employees paycheck into the authorized employees bank account Payroll Card A payroll card electronically carries the balance of the employees net pay Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.

3.

2.13.1.G1

Payment Method Pros and ConsPaycheck Pros: Employee controls when the check is deposited Cons: Least secure, employee responsible for getting it to the bank

Payroll card Pros: Wages automatically loaded onto a card Cons May charge fees for use of the card

Direct Deposit Pros: No direct handling of check Employee knows exactly when he/she will be paid Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Reading A Paycheck StubItems on a paycheck stub include:Personal Information -The employees full name, address, and social security number or employee identification number Pay Period -The length of time for which an employees wages are calculated Most businesses pay employees either weekly, bi-weekly, or monthly Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Reading A Paycheck StubGross Pay The total amount of money earned before payroll withholdings If a person earns an hourly wage, gross pay is calculated by multiplying the number of hours worked by the wage

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

What is the Gross Pay?If Miss Patty Paycheck worked at Terrific Tacos for $6.00/hour for 15 hours a week what will her gross pay be?# hours worked x wage = gross pay 15 hours x $6.00/hr = $90.00/week

What is Miss Patty Paychecks gross pay for a two week pay period?30 hours x $6.00/hr = $180.00 for 2 weeks Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Reading A Paycheck Stub Payroll Withholdings The amount of money subtracted from the gross pay for taxes. Typically about 30% of your paycheck! Withholding Tax The amount required by law for employers to withhold from earned wages to pay taxes FICA-Federal Insurance Contribution Act Fed OASDI/EE (Federal Old Age Survivors Disability Insurance Employee Employment Tax) or Social Security - helps provide retirement income for the elderly and pays disability benefits Fed MED/EE (Federal Medicare Employee Employment Tax) or Medicare - health care program for the elderly and disabled Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Reading A Paycheck Stub Net Pay The amount left after all payroll deductions have been taken from the gross pay Net pay is also referred to as take home pay

Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

2.13.1.G1

Miss Patty Paychecks Paycheck Stub Miss Patty Paychecks paycheck includes: Gross Pay $180.00 Payroll Withholdings: Federal Withholding Tax $14.10 State Withholding Tax $5.45 FICA $13.77

What is her Net Pay? Gross Pay Payroll Withholdings = Net Pay$180.00 ($14.10 + $5.45 + $13.77) = $146.68 Family Economics & Financial Education February 2006 Get Ready to Take Charge of Your Finances Planet Paycheck Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Fami