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What is net pay?

Back

Net pay is the amount of money an employee takes home after all deductions, including taxes and other withholdings, have been subtracted from their gross pay.

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CCSS.7.RP.A.3

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What are common deductions from gross pay?

Back

Common deductions include federal and state taxes, Social Security, Medicare, health insurance premiums, retirement contributions, and other voluntary deductions.

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CCSS.6.RP.A.3B

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How do you calculate net pay?

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Net pay is calculated by subtracting total deductions from gross pay: Net Pay = Gross Pay - Total Deductions.

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CCSS.6.RP.A.3D

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What is gross pay?

Back

Gross pay is the total amount of money earned by an employee before any deductions are made.

Tags

CCSS.6.NS.B.3

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What is the purpose of withholding taxes?

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Withholding taxes are deducted from an employee's paycheck to cover their estimated tax liability for the year, ensuring that taxes are paid gradually throughout the year.

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What is the difference between federal and state taxes?

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Federal taxes are imposed by the national government, while state taxes are imposed by individual states. Both are deducted from an employee's paycheck.

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What is a pay stub?

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A pay stub is a document provided by an employer that outlines an employee's earnings, deductions, and net pay for a specific pay period.

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How do you round numbers in paycheck calculations?

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Rounding in paycheck calculations typically involves rounding to the nearest cent (two decimal places) for monetary values.

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CCSS.5.NBT.A.4

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What is the significance of understanding net pay?

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Understanding net pay is crucial for budgeting and financial planning, as it represents the actual income available for spending and saving.

Tags

CCSS.6.NS.C.7C

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What is a tax bracket?

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A tax bracket is a range of income that is taxed at a specific rate. As income increases, it may fall into higher tax brackets with higher rates.

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CCSS.7.RP.A.3