Examining Pay and Benefits!!!

1. Examining Pay and Benefits!!! Section 8.1

2. Types of Pay • Salary—A set amount of money earned by an employee per year or other fixed length of time.( Each paycheck reflects the total salary for the year divided by the number of pay periods in the year.) • Wages—a set amount of money that an employee earns per hour of work. (Your paycheck is computed by multiplying the pay per hour by the number of hours you work.) • Piecework—Similar to wages, but you are paid based on the number of items or pieces produced. • Commission—A fixed percentage or amount of profit that an employee earns for a sale completion.

3. Types of Pay Cont… • Bonus—a sum of money paid to an employee in addition to regular wages or salary. (You usually need to have met certain goals.) • Tips—this is given to an employee by a customer in exchange for a service.

4. Regulating Affecting Pay • Fair Labor Standards Act (FLSA) guarantees equal pay for the same job. The rules apply to people working at the same job at the same level. • Minimum wage is set by the state, setting the minimum amount an employer may pay an employee per hour. • Overtime—Most jobs pay per hour are based on a 40 hour week . Any hours worked over 40 hours per week is considered overtime, and is paid at least 1 ½ times the regular rate of pay.

5. Regulations Affecting Pay • Overtime—The FLSA states jobs paying hourly wages must compensate their employees with overtime pay.

6. Types of Benefits • Insurance Benefits—paid health plans are often offered by companies. (this is much less costly than buying personal insurance.) • Savings and Retirement benefits • Other Benefits.—paid holidays, vacation, and sick leaves.

7. Employment Classifications • Full-time—At least 35 hours a week • Part-time—Fewer then 35 hours a week • Temporary—workers that are hired to fill temporary vacancies or to help with temporary work. • The worker is hired by an angency and the agency is hired by the employer • Contract

8. Thought of the Day --Write a brief response to the question below. *The running of the government and the many programs it provides are all thanks to the American people and the taxes they pay. How do you feel about the way that the government is using your tax dollars, today?

9. Understanding Your Paycheck Section 8.2

10. How Employees are Paid • Weekly • Bi-Weekly • Once a month • Twice a month • Direct Deposit—Pay is electronically transferred directly into the recipient's bank account. Still receive a pay stub as a receipt showing all pertinent information, however it cannot be cashed or deposited.

11. Information on your pay stub • Your Identification • Name • Address • Social Security number and Employee number may be included.

12. Earnings • Your earnings • Number of hours worked during the current pay period. • Salaried employees may reflect the number of regular working hours in the pay period or may be left blank. • Gross Pay—The total amount of money earned for working during the pay period. • Total earned so far this year. • Your Deductions • Your Net Pay

13. Deductions • Tax Withholdings • Federal Income Tax: Taxes taken out of a paycheck that go to the federal government. The bulk of this money is used to fund the military and education programs. • Social Security: Withholdings that go into the federal government program that provides income support to people who are unemployed, disabled, or over the age of 65. • Medicare: Withholdings that go into the federal health insurance program for people 65 and older, and also for people with disabilities.

14. Deductions • Anything that is subtracted from gross pay. • Tax withholdings—Taxes taken out of your pay • Income tax(state and local) • Federal tax (Social Security (FICA)

15. Deductions- • Benefits-(Contributions to employee programs) • Insurance (Medical, dental and vision care) • Saving or retirement plans (ie: pension, 401K) • Net pay-The amount of pay an employee is left with after taxes and other deductions are subtracted from the gross pay. Also know as “take-home pay”.

16. Deductions cont… • State Income Tax: Taxes taken out of a paycheck that go to the state government. These taxes are used for schools, roads, police and other state funded programs. • City/Local Income Tax: Taxes taken out of a paycheck that go to the city/local government. Not everyone pays city or local taxes; it depends on where you live and work.

17. Another Look at Taxes! *TAX FREE DAY—this idea represents how long Americans work to pay their federal, state and city income taxes each year. *The latest tax free date in history was May 3, 2000

18. Tax Free Dates for 2009 • National Average was April 13 • Alaska had the earliest date on March 23rd • Connecticut had the latest date, April 30th • Illinois fell directly in line with the national average with a Tax free date of April 13th.

19. Yet Another Look at Taxes!!!

20. Deductions cont… • Benefits • Life insurance • Accident Insurance • Health Insurance • Retirement

21. Paying Income Taxes • Section 8.3

22. Your income tax responsibilities… • Complete a form that allows your employer to withhold income taxes from your pay. • File a tax return at least once a year, and pay additional taxes owed.

23. Income Tax Withholding • Form W-4 • Personal information • Exemptions status • Allowances—these are factors affecting the amount of income tax withholdings. The more allowances you claim, the less tax your employer with take out.

24. Getting ready for tax time… • April 15 each year your taxes must be submitted, if not the IRS can charge you penalty and interest on the outstanding amount you owe.

25. Do you need to file.. • All employed people need to file with few exceptions as follows based on earnings: • Some self-employed • Some over the age of 65 • Some single adults • When in doubt file or call the IRS help line for verification.

26. What you need to file your taxes… • Form W-2—this is an earning statement that is required to be produced for you by Jan. 31 of each year by your employer. • Form 1099—This is the earning statement that you will receive for each bank and money market account that you have that earns interest. • IRS instruction booklet and form • Personal Records

27. Terms used for filing… • Filing status—this is basically asking if you are married or single. • Exemptions—this question is to obtain the number of people that you support. Exemptions can included yourself, spouse, children or other relatives that depend on you support. • Income—This must include all money made through any source throughout the year.

28. Terms used for filing… • Deductions—this reduces the amount of income that is taxed. This can included things like money given to charity, or interest on a home loan. • Itemized deduction—list each separately • Standardized—this is a set amount that the IRS allows with out listing actual expenses.

29. Terms used for filing… • Taxable income—You can subtract an additional amount from your income based on the number of exemptions you claim, the left over is your taxable income. • Tax owed—this is the amount you must pay the US government. • Tax Credit—this is subtracted directly from the amount of taxes owed. This includes things like paying for college tuition and child care expenses.

30. Benefits of Planning • Electronic Filing