Family & Consumer Science: Unit 1, Lesson 2

Unit 1

Supporting Yourself & Your Family

• Investigate salaries and working conditions for a variety of occupations.

• Examine the tradeoffs between income, benefits, flexibility, personal satisfaction, and vacation time in selecting employment.

• Paychecks

Gross Income versus Net Income

Paychecks

• Most working adults receive a conventional paycheck that withholds taxes and other deductions.

• The federal minimum wage is $7.25/hour. Many states and cities have a minimum wage that is higher than the federal minimum wage. A company that issues conventional checks is legally required to pay you at least the minimum wage.

Word Cloud

Use a search engine to look up the minimum wage in California. What is it?

Fill in the Blank

How much will you earn working a 40 hour work week at $7.25?

$

Fill in the Blank

How much will you earn working a 40 hour work week at $16.00?

$

Gross vs. Net Income

​Paychecks

• If you receive a conventional paycheck, the amount you calculated in the previous question determines your gross income.

• Your gross pay is the amount you earn before any taxes or deductions are taken out. You do earn the entire $290 but you do not receive all that you earn. That is the difference between gross and net income. Y

• Your net income is the amount of money left after all taxes and other deductions are withdrawn. Your net income is also known as your take home pay.

Paycheck Deductions

​FICA

• FICA combines both Medicare and Social Security so you may only see FICA on your check instead of both Social Security and Medicare.

Paycheck Deductions

​Federal and State Income Taxes

• Federal income tax will be deducted from your paycheck. How much will be deducted is based on your total income, your number of dependents, whether you are single or married, and your tax bracket, which is determined by your income.

• State income tax will also be withheld depending on the state where you live and its tax policies.

​Other Deductions

• Savings: A portion of your paycheck may also be deposited into a savings account in a separate bank. This will help you prepare for the future and you will not feel like you are missing money because it is already taken out of your paycheck.

• Health, dental, life and disability insurances are paid through a deduction from employees’ paychecks. Insurance purchased through an employer’s plan is often less expensive than what an individual can purchase in the open market. The cost of these plans will be deducted from the paycheck as well.

• 401(k) retirement savings: Companies also offer 401(k) plans or similar retirement plans where employees have a percentage of their income set aside in a tax-advantaged retirement savings account. We’ll talk more about these plans later in the course, but this is another typical deduction from the paycheck.

Multiple Choice

Combines both Medicare and Social Security so you may only see FICA on your check instead of both Social Security and Medicare.

• Federal income tax

• FICA

• Savings:

• State income tax

Multiple Choice

Deducted from your paycheck. How much will be deducted is based on your total income, your number of dependents, whether you are single or married, and your tax bracket, which is determined by your income.

• Savings

• 401k

• FICA

• Federal Income Tax

Multiple Choice

A portion of your paycheck may also be deposited into a savings account in a separate bank.

• Savings

• FICA

• Income

• Tax

​Taxes

A tax is a government fee on income, property, things you buy, or other activities. Examples of taxes include income tax, sales tax, and property tax.

​Taxes

Income Tax

Income tax is the amount of tax deducted based on your income. There are federal and state income taxes. The tax rate is determined by where you live.  Some states have income taxes and others do not.

Sales Tax

Sales tax is charged on certain goods and services that one buys. This is a state and/or local tax. For example, you may notice that there is no sales tax on milk from the grocery store but there is sales tax on the new television your parents just bought. Some places include the sales tax in the price of their product while others add it on at the end of your purchase. 

​Taxes

Property Tax

Property tax is a tax that you pay on any property you own. If your parents own your home, they pay a property tax based on the value of your land and home. Property tax is a local tax that is decided by your state and local government. They calculate the value of your property and tax you based on this value.

Multiple Choice

How much Social Security was withheld from Erica’s check?

• None

• $240.00

• $800.00

• $763.34

What were Erica’s total earnings?

Multiple Choice

What were Erica’s total earnings?

• $10,232

• $12,312.00

• None

• $500.00

What is Erica’s Social Security number?

Multiple Choice

What is Erica’s Social Security number?

• 515-21-5196

• 987-65-4321

• 123-45-6789

How much federal income tax was withheld from Erica’s paychecks?

Multiple Choice

How much federal income tax was withheld from Erica’s paychecks?

• $984.96

• $969.25

• $20.00

• $500.23

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