U3L2 - Taxes and Your Pay Stub

Where'd All My Money Go?

U3L2 - Taxes & Your Pay Stub

Everyone pays taxes, and many people complain about them....

But why? Watch the video on the next slide to learn where tax revenue comes from and what exactly the government is spending that money on.

Multiple Choice

What does FICA consist of?

• Health Insurance

• Social Security and Medicare

• Federal and State Taxes

• Employer Sponsored Retirement

Multiple Select

What are two examples of discretionary spending?

• Social Security

• Education

• Military

• Medicare

Multiple Choice

All of the following options are benefits we receive as a result of government spending EXCEPT...

• Air quality

• Credit card debt forgiveness

• Public school education

• National Parks maintenance

Your Federal Income Tax Receipt

This interactive calculator allows you to see a “receipt” for your taxes, detailing exactly where your dollars were spent. Enter your federal income taxes paid for the previous year into the calculator. If you didn’t pay federal income taxes, enter $8,300 (taxes paid for a salary of $70,784 - the median salary of a U.S. household in 2021). Then answer the questions on the next two slides.

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Open Ended

What's one category you wish fewer taxes were spent on? Why?

Open Ended

What's one category you wish more taxes were spent on? Why?

Reading your pay stub can be challenging if you don’t know where to start! Watch this short video on how to read a pay stub.

How to Read a Paystub

Multiple Choice

What is the difference between gross pay and net pay?

• Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay.

• Net pay is before taxes and deductions are subtracted; Gross pay is your take-home pay.

• There is no difference between gross pay and net pay.

Multiple Choice

What are Pre-Tax Deductions and Contributions?

• Contributions taken out of your paycheck BEFORE taxes are calculated on your income

• Contributions taken out of your paycheck AFTER taxes are calculated on your income

Multiple Choice

What are two examples of Employer Contributions?

• 401k & Roth IRA

• Traditional & Roth IRA

• Federal & State Taxes

• Health Insurance & 401k

Reading a Paystub

It’s now time to practice reading a pay stub! Follow the directions in the interactive on the next slide to complete all 3 parts of the simulation. Identify any questions you have below as you are completing the simulation.

Reading a Pay Stub: Activity 1 of 3 | TV411

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Now that you’ve had some practice reading a pay stub, let’s look at a sample pay stub and put all of your skills to the test! Use the pay stub below to answer the questions that follow.

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FINE PRINT: Pay Stub

Multiple Choice

About how frequently does Hope receive a paycheck?

• Daily

• Weekly

• Every two weeks

• Monthly

Multiple Choice

Assuming that Hope receives a paycheck at regular intervals similar to the stub shown, how many pay periods has Hope had year-to-date?

• 2

• 3

• 8

• 9

Multiple Choice

Which statement below accurately describes Hope's gross wages?

• Gross wages are calculated by multiplying Hope's hourly rate by the number of hours she worked.

• Gross wages are Hope's fixed salary, which she receives for every pay period.

• Gross wages are calculated by subtracting all of Hope's deductions from her gross income.

• Gross wages are how much Hope has earned over the course of the entire year.

Multiple Choice

What was the largest deduction for this pay period?

• FICA Medicare Tax

• FICA Social Security Tax

• Federal Tax

• NC State Tax

Multiple Choice

Look at the lines that say HEALTH, DENTAL, and RETIREMENT. Which statement below is accurate?

• Those lines represent taxes that Hope paid to the Federal government.

• Those lines represent taxes that Hope paid to the state government.

• Those lines represent benefits that the employer is paying to Hope in addition to her wages.

• Those lines represent insurance and retirement plans that Hope funds directly from her paycheck.

Multiple Choice

Hope's contribution to her RETIREMENT plan...

• is a post-tax contribution on which she pays federal income taxes.

• is pre-tax and therefore not included in federal income taxes.

• is a contribution to her Social Security.

• is taxed at a rate of 15%.

Multiple Choice

What was the TOTAL amount deducted from Hope's last paycheck?

• $90.00

• $284.79

• $315.21

• $600.00

Multiple Choice

One of Hope's coworkers quits, and during the next pay period Hope works 60 hours instead of 40 to help cover the shifts. Which of Hope's deductions will change as a result?

• Her Federal Tax

• Her Health

• Her Dental

• Her Retirement

Multiple Choice

Which of the following statements is TRUE?

• Hope has had more deductions this year than take home pay.

• Hope has had more take home pay this year than deductions.

• Hope has had equal amounts of take home pay and deductions this year.

• Hope's paystub only shows deductions and take home pay for this pay period, not the entire year to date.

Multiple Choice

Hope's employer deposits her paycheck directly into her checking account. How much would her employer have deposited into Hope's checking account on the most recent payday of 5/21/20?

• $40.00

• $284.79

• $315.21

• $600.00

Open Ended

What important information is available on a pay stub?