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WHAT HAPPENED TO MY PAYCHECK?

WHAT HAPPENED TO MY PAYCHECK?. GROSS PAY (earnings): Taxable income before any adjustments TOTAL COMPENSATION: DIRECT + INDIRECT COMPENSATION DIRECT COMPENSATION: payments in $ (wages, bonuses, commission)

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WHAT HAPPENED TO MY PAYCHECK?

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  1. WHAT HAPPENED TO MY PAYCHECK?

  2. GROSS PAY (earnings): Taxable income before any adjustments • TOTAL COMPENSATION: DIRECT + INDIRECT COMPENSATION • DIRECT COMPENSATION: payments in $ (wages, bonuses, commission) • INDIRECT COMPENSATON: FRINGE BENEFITS: benefits paid by the employer (insurance, time off etc.)= additional 40% above direct compensaton

  3. NET PAY=GROSS PAY-MANDATORY AND VOLUNTARY DEDUCTIONS • MANDATORY DEDUCTIONS: must be deducted (laws) • Income Tax: 28% Federal 7.5-10% State 3.5% City

  4. FICA: Social Security, Medicare • Unemployment Insurance • NYS Disability • NYS Workmen’s Compensation • VOLUNTARY DEDUCTIONS • Insurance premiums • Pension, 401K, IRA contributions • Savings plans, savings bonds • Transit check

  5. NET PAY • “Pay yourself first” • Financial goals: • Short term <1 year • Intermediate 1-3 years • Long term >3 years • Needs vs. Wants • Emergency fund: 3-6 months salary

  6. BUDGETING • DISCRETIONARY INCOME (surplus)=NET PAY – necessities • Fixed vs. variable expenses

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