Welcome to the Real World (Part 1)

Welcome to the Real World

(Part 1- Paychecks)

By Jennifer Harris

​READ the SLIDES, and answer the questions... at the end of the 3 parts you will be completing a google form quiz with questions about all these concepts.

Fill in the Blank

When you work, the amount of money you make BEFORE any taxes are taken out is called your GROSS income. The amount of money you make AFTER taxes/deductions are taken out is called your NET income.

What will ALWAYS be MORE, gross or net income?

​EXAMINE THIS PAYCHECK: This person makes $22 p/hr, & worked 80 hours (2 weeks full-time).

The GROSS pay for the period is $22•80 hours = $1760.00.

The NET pay is the amount of the paycheck, after all the deductions... or $1,362.65

The amount if deductions taken out for taxes this pay period is $397.35.​

• Health Insurance / Dental

• Disability

• Child Support

• Retirement Savings

• Child Care ​

​

​

Other Possible Deductions: ​

• Federal income tax

• State income tax

• CITY tax (like NYC or Philly)

• FICA​ (Social Security/ Medicare)

• Unemployment​ Insurance

​Types of Taxes:

There are lots of types of deductions: some are taxes/some are not...

Multiple Choice

Which of the following is a real tax people may pay?

• City Tax

• FIFA

• Disability

• Retirement

Multiple Choice

What if this SAME person still made $22 p/hr but only worked 36 hours per week

during the next two-week pay period?

Now how much would her GROSS income be for the two week pay period?

(hours worked * hourly rate)

• $792

• $1219.68

• $1584

• Cannot be determined

$1584​

You should have just done:

36 hours each week x 2 weeks

= 72 total hours

$22 hr x 72 hours =  

Multiple Choice

What if the SAME person got a raise from $22 to $25 an hour,

but still worked the 80 hours per pay period,

what would her GROSS pay NOW be for the two-week pay period?

• $460

• $1000

• $1540

• $2000

$2000

You should have just done:

80 hours total x $25 =

Gross pay = $457

Total tax Deductions = $81.50​​

% tax = 81.50 / 457 = 0.1783

= 17.83% or about 18%​

​

Net pay = $457 - $81.50 = $375.50

% Net pay = $375.50 / $457 (net/gross)

= about 72%​

Or try this one:

​% of taxes taken out =

$397.35/ $1,760 = ​0.2258 = 22.58% (move two decimal places)

so​

about 23% taken out in taxes!

​So for the last example:

To figure out the percentage of tax taken out:

% of taxes = DEDUCTIONS ÷ GROSS

% of net pay = Net Pay ÷ gross​

Multiple Choice

TRY THIS:

Your gross income is $1645

Total tax deductions is $365.

What percentage is taken out for taxes?

• 0.22

• 22%

• 0.78

• 78%

22%​

You should have just done:

deductions/gross =

$365 / $1645 = 0.22​

Multiple Choice

TRY THIS:

Your gross income is $1500

Total deductions is $365.

What is your NET pay?

• 24%

• 76%

• $1135

• cannot be determined

Multiple Choice

TRY THIS:

Your gross income is $1500

Total deductions is $365.

What is the percentage of NET pay?

• 24%

• 76%

• $1135

• cannot be determined

Once you know about what percentage is taken out in taxes each paycheck, you can begin to estimate how much will be taken out in general and what your Net pay will be depending on how much you work.

​READ this Example:

You make $18 an hour. You are scheduled for 35 hours this week and 20 hours next week. You know you have about 26% taken out in taxes. You can calculate each of the following: Gross pay, Amount of Deductions, Net Pay (Take-Home Pay)

Some text here about the topic of discussion

You make $18 an hour. You get a paycheck every two weeks.

You are scheduled for 35 hours this week and 20 hours next week.

You have about 26% taken out in taxes. Calculate each of the following:

Gross Pay, Amount of Deductions, Net pay​

Solutions:

First: 35 hrs + 20 hrs = 55 total hours for the pay period.​

Gross Pay = $18•55 hours = $990

Amount of Deductions: 26% of $990 = 0.26 • $990 = $257.40​

Net pay (Take Home Pay) = $990 - 257.40 = $732.60​

Some text here about the topic of discussion

Multiple Choice

TRY THIS:

You make $17.50 an hour.

You are scheduled for 18 hours this week and 23 hours next week.

You get 21% taken out in taxes.

What will your GROSS pay be for this two week pay period?

• $315

• $150.68

• $717.50

• $566.83

Multiple Choice

TRY THIS:

You make $17.50 an hour.

You are scheduled for 18 hours this week and 23 hours next week.

You get 21% taken out in taxes.

So your GROSS pay is 17.50 (41 hours) = $717.50

How much will be taken out in taxes?

• $315

• $150.68

• $566.83

• Cannot be determined

Multiple Choice

TRY THIS:

You make $17.50 an hour.

You are scheduled for 18 hours this week and 23 hours next week.

You get 21% taken out in taxes.

So your GROSS pay is 17.50 (41 hours) = $717.50

What will your NET or TAKE HOME pay be?

• $315

• $150.68

• $566.83

• Cannot be determined

Multiple Choice

So let's do more math:

You make $15.75 an hour.

You work 32 hours this week.

You have 23% taken out in taxes.

WHICH OF THE FOLLOWING DESCRIBES YOUR PAYCHECK?

• $504 is your GROSS Income

  $388.08 is your NET income

• $504 is your NET income

  $388.08 is your GROSS income

• $504 is your GROSS income

  $115.92 is your NET income

• $504 is your NETincome

  $115.92 is your GROSS income

Multiple Choice

Examine this paycheck. What the gross pay for this pay period?

• $1018.50

• $239.88

• $778.62

• Cannot be determined

Multiple Choice

Examine this paycheck. What is the total amount of deductions for this pay period?

• $1018.50

• $239.88

• $778.62

• Cannot be determined

Multiple Choice

Examine this paycheck. What is your NET pay for this pay period?

• $1018.50

• $239.88

• $778.62

• Cannot be determined

Multiple Choice

Examine this paycheck. What % was taken out in taxes?

• about 20%

• about 23%

• about 26%

• About 73%