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FL Chapter 2 Study Guide KEY…

FL Chapter 2 Study Guide KEY…. Two types of employees: Hourly Salaried Lowest rate of pay: Minimum Wage Overtime is 1.5 times regular pay for over 40 hours What type of employee does not keep time cards? Salaried. 5. List required payroll deductions Federal income tax

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FL Chapter 2 Study Guide KEY…

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  1. FL Chapter 2 Study Guide KEY… • Two types of employees: • Hourly • Salaried • Lowest rate of pay: • Minimum Wage • Overtime is 1.5 times regular pay for over 40 hours • What type of employee does not keep time cards? • Salaried

  2. 5. List required payroll deductions • Federal income tax • state income tax (most states but not all) • social security tax • medicare tax • 6. optional (voluntary) payroll deductions • retirement (401K, 403B, pension) • disability insurance • medical insurance contribution • union dues • life insurance

  3. 7. Forms of payment other than wages or salary: BENEFITS8. Benefits for full-time workers: Pay without work (vacations, holidays, sick pay) Education reimbursement Perks Retirement plans (company matching) Stock option plans Medical/Dental Insurance • Pay without work refers to times when an employee who is not working will still be paid. Examples: Paid vacations, holidays and sick days • 10. 401K is a Retirement plan. - NOT taxed until you withdraw it. • It is an OPTIONAL deduction from your paycheck.

  4. 11. Self-employed person who takes risk of owning business: • ENTREPRENEUR • 12. Lifestyle Business: Your own hobbies and intends to keep it small and work it him/herself • Venture Business: Intends to expand and become a corporation • Self employment: • Advantages: Disadvantages: • owner makes all decisions must take risks (risky) • sets the hours of the business long, hard work at first • keeps all profits money tight at first • Money received from sources other than actively working a job: • UNEARNED INCOME

  5. 15. Earned Income Unearned Income Interest Disability Dividends Social Security Benefits Unemployment Benefits Pension (Retirement ) • Wages (regular pay and OT) • Salaries • Tips • Commissions

  6. 16. Perks: • Office with a view, company car, parking space, coffee station • 17. Benefits of paying taxes: • public roads and highways • police protection • public schools • national and local parks • national security – armed forces • 18. Disability Insurance: replaces lost income when illness or injury prevents an employee from working. It is an OPTIONAL deduction.

  7. 19. a. Regular Pay: 40 x $10 = $400 Overtime Pay: 5 x $15 = $75 Total Gross Pay: $475 b. Weekly salary: $39,000/ 52 weeks = $750/ week Gross Pay c. Gross pay per week = $750 750 x 10% = $75 federal income tax 750 x 6.2% = $46.50 social security tax 750 x 1.45% = $10.88 medicare tax Total Deductions = $132.38 750 – 132.38 = $617.62 Net Pay per week

  8. Ch. 2 Quiz Today 5 minute opener: Quiz your neighbor on the key terms- 3rd page on your study guide Then: Quiz Review Game .

  9. 19. Self-employment Advantages and Disadvantages Advantages Disadvantages if fails, invested money is lost must take risks (risky) hard to get credit initial startup is hard work money tight at first • can make the decisions • can set your own hours • can keep all the profits • Critical Listening Skills • Evaluate the information • Consider only important or relevant info • Make decision on what is accurate and useful • Focus and eliminated distractions • Face the speaker, make eye contact, nod and show interest • Mentally summarize main points

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