Financial Literacy

Part of the Career Management Course for WBL Students

Your Paycheck

Payroll and Taxes

Deductions

What do you know?

1) _______ is the total amount of person’s

or company’s income before any taxes

and deductions are taken out.

2) ______ is the sum of all financial

records of salaries, wages, bonuses,

and deductions.

3) _____ is the amount of income received

after taxes and deductions have been

taken out.

What is a Payroll?

A payroll is the sum of all

financial records of salaries,

wages, bonuses, and deductions

The information from your employer’s payroll is used to generate your paycheck.

Paychecks

• Your paycheck may be a paper document or an electronic transfer known as a direct deposit.

• It is calculated on a document known as a play slip.

How is my paycheck calculated?

Gross Income

Less: Deductions

Net Income

Your pay slip sets forth a

statement of your earnings:

What is Gross Income?

The total amount of person’s or

company’s income before any

taxes and deductions are taken

out.

What Taxes?

• Federal and State Incomes Taxes

• City/Local Income Taxes

• FICA:– Social Security– Medicare

What Deductions?

Deductions include:

• Group Health Insurance

• Retirement/Pension contributions

• Charitable contributions

• Miscellaneous such as union dues

What is Net Income?

The amount of income

received after taxes and

deductions have been

taken out.

Equation

Gross Income

Less Taxes

Less Deductions

Equals Net Income

Understanding Check

Lonnie Flanagan's weekly gross income

is $1,250. Each week she has $64.37 in

deductions, plus state tax of two percent

of her gross pay, and Social Security and

Medicare taxes of 7.65 percent of her

income. What is her net income?

A) $185.00 B) $1,058.79 C) $1,065.00 D)

$1,435.00

The Answer

A) $185.00

B) $1,058.79

C) $1,065.00

D) $1,435.00

What did you know?

1) Gross Income is the total amount of

person’s or company’s income before any

taxes and deductions are taken out.

2) Payroll is the sum of all financial records

of salaries, wages, bonuses, and

deductions.

3) Net Income is the amount of income

received after taxes and deductions have

been taken out.

Assignment

Go to the following website and click on Lessons-Exam 2 for more information on taxes and deductions:

http://ww2.nscc.edu/Math1075-100/lessons.htm