How to Read a Pay Stub

​Pay Stubs

• Hourly Wage

• ​Salary

• Commission​

• Overtime​

• Tips​

​

​Can you think of any others?

​When people work, they can earn money in different ways:

​

​Hourly Wage

​When you earn a specific amount of money for each hour of work you complete.

For example: You might get paid $16.25 an hour

​

If you work 20 hours per week, you can calculate your hourly wage by taking:

$16​.25 x 20

​

​

​

​Salary

• ​A fixed regular payment, typically paid on a monthly or biweekly basis

• Often expressed as an annual sum

For example:

$48,000 / year

Paid once a month is $4,000 per month (gross pay)

Paid biweekly is $2,000 every two weeks (gross pay)​

Multiple Select

Select all of the ways that people might earn pay:

• Hourly Wage

• Salary

• Tips

• Commission

​Pay Stub

​Whether you are paid weekly, biweekly or monthly, you will typically receive a pay stub

• The pay stub shows a breakdown of what you've earned, what you paid in taxes & any other withholdings​

​Pay Stub

Example

​If Paychecks Could Talk

​On the next slide we will watch a video that explains the elements of a paycheck--listen carefully, as we will be discussing this information today!

​Elements of a Pay Stub:

• ​Employee Information

• Employer Information​

• ​Summary of Pay (Gross Pay)

• Pre-tax withholdings

• Tax withholdings

• Other withholdings

• ​Net Pay

​Gross Pay

​The money earned before taxes, withholdings and other deductions are subtracted

​

For example: Your bi-weekly or monthly salary OR the calculation of your hourly wage x hours worked​

​

​

​Net Pay

​The money you earn after any taxes, deductions or withholdings are subtracted--the amount you actually bring home

​

Gross Pay - Taxes/Deductions = Net Pay​

​

​Taxes

​When you work, you typically pay taxes. Those taxes can include:

• State Income Tax

• Federal Income Tax

• Local Income Tax (KCE tax)​

​Social Security

​Employees pay into Social Security from their paychecks

• This money is wit​hheld by the federal government & paid out to you in equal disbursements at retirement age

​

​Medicare

​Employees pay into Medicare from their paychecks

• This money is wit​hheld by the federal government & used to help you pay for your medical benefits at retirement age

Match

Match the following

• Social Security Tax

• Net Pay

• Gross Pay

• Medicare

• Taxes

Money withheld from the government & paid out at retirement age

The money you bring home each pay period

The money you earn before taxes & deductions are subtracted

Money withheld to help pay for your medical benefits at retirement age

State Income & Federal Income taxes

• Money withheld from the government & paid out at retirement age

• The money you bring home each pay period

• The money you earn before taxes & deductions are subtracted

• Money withheld to help pay for your medical benefits at retirement age

• State Income & Federal Income taxes

​Pre-tax deductions

​These are items withheld from your Gross Pay before any other taxes have been subtracted

Examples: 401-K contributions, ​Health Savings Accounts

​

What would be the benefit of contributing to these pre-tax?​

​

​Current vs YTD

​A pay stub categorizes all earnings, taxes, withholdings, etc into 2 categories:

Current = the money being withheld in this pay period alone

YTD = Year-to-date and is a running total of all money withheld to that point​

Open Ended

In your own words, describe the difference between Current & YTD earnings.

​Let's use the link below to look at a labeled Pay Stub together

​https://www.payroll4construction.com/construction-pay-stub-explained/

Multiple Choice

Using the picture, if this is only this employees 2nd paycheck, how much was the gross pay on the first paycheck?

• $1852.00

• $1000.00

• $1862.00

• None of the above

Multiple Choice

How much did Jose earn this pay period?

• $1335.00

• $445.00

• $340.52

• None of the above

Multiple Choice

How much money did Jose take home this pay period?

• $340.52

• $445.00

• $1,021.56

• None of the above

Multiple Choice

How much has Jose paid in Social Security Tax since the beginning of the year?

• $82.77

• $27.59

• $19.35

• None of the above

Multiple Choice

How much has Jose paid in Disability tax so far this year?

• $.60

• $1.80

• $5.34

• None of the above

Multiple Choice

How much Medicare tax has been deducted from his current pay?

• $1.80

• $16.02

• $6.45

• None of the above

Multiple Choice

What is the total amount of Jose’s deductions for this paycheck?

• $104.48

• $104.84

• $68.39

• None of the above

Multiple Choice

What would Jose’s gross pay be if he worked 52 hours in one week?

• $540.00

• $520.00

• $580.00

• None of the above

Multiple Choice

How many vacation days does Jose have left? (8 hours count as 1 day.)

• 1

• 3

• 5

• None of the above

Multiple Choice

Tara’s deductions add up to $112 a week. If her net pay is $425 a week, what is her gross pay?

• $112.00

• $313.00

• $425.00

• $537.00

Multiple Choice

Ruth earns $13.25/hour. She works 40 hours/week. $90.72 is deducted each week. What’s her net pay?

• $530.00

• $345.68

• $90.72

• $439.28