MANAGING YOUR PERSONAL FINANCES UNIT 2: CALCULATING GROSS PAY, DEDUCTIONS AND NET PAY
M ANAGING YOUR P ERSONAL F INANCES U NIT 2: C ALCULATING G ROSS P AY, D EDUCTIONS AND N ET P AY.
Dec 24, 2015
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MANAGING YOUR PERSONAL FINANCES
UNIT 2: CALCULATING GROSS PAY, DEDUCTIONS
AND NET PAY
DO NOW:Round the following number to tenths, hundredths, and thousands:
6.5518 tenths hundredths thousands
DAILY GOALS I will be able to correctly round
numbers to the tenths, hundredths and thousands.
I will be able to calculate net pay.
Rounding Practice
See Rounding Practice Handout
Salaried Employees are not on a Time Clock …
These employees get an annual salary that is paid: * Monthly (12 times per year)
* Twice a Month (24 times per year)
* BiWeekly (26 times per year)
Calculating DeductionsPractice calculating deductions on a gross salary of $100.00. Use the following payroll tax deductions:FICA – 6.2% 6.2 % x $100 = _______Medicare – 1.45% 1.45% x $100 = _______FIT – 10% 10% x $100 = _______SIT – 1.5% 1.5% x $100 =_______
What is your total deductions? _______
Calculating DeductionsPractice calculating deductions on a gross salary of $100.00. Use the following payroll tax deductions:FICA – 6.2% 6.2 % x $100 = _______Medicare – 1.45% 1.45% x $100 = _______FIT – 10% 10% x $100 = _______SIT – 1.5% 1.5% x $100 =_______
What is your total deductions? _______
Important Note: All
deductions should add up to about
20% of your gross salary.
Calculation check: Is your
answer for total deductions about 20%
of your gross salary?
Calculating DeductionsPractice calculating deductions on a gross salary of $500.00. Use the following payroll tax deductions:FICA – 6.2% 6.2 % x $500 = _______Medicare – 1.45% 1.45% x $500 = _______FIT – 10% 10% x $500 = _______SIT – 1.5% 1.5% x $500 =_______
What is your total deductions? _______
Calculating DeductionsPractice calculating deductions on a gross salary of $500.00. Use the following payroll tax deductions:FICA – 6.2% 6.2 % x $500 = _______Medicare – 1.45% 1.45% x $500 = _______FIT – 10% 10% x $500 = _______SIT – 1.5% 1.5% x $500 =_______
What is your total deductions? _______
Calculation check:
Is your answer for total deduction
20% of your gross salary?
Basic Net Pay Formula:(for hourly employees)
Net Pay = Gross Pay – Deductions
N = G - D
Basic Net Pay Formula:(for hourly employees)
Practice: Calculate Neve’s Net Pay. Neve’s Gross is $200 and Deductions are $40?
Net Pay = Gross Pay - Deductions
Basic Net Pay Formula:(for hourly employees)
Practice: Calculate Eric’s Net Pay. Neve’s Gross is $300 and Deductions are $60?
Net Pay = Gross Pay - Deductions
Basic Net Pay Formula (N=G-D):
Practice: Calculate Justin’s Net Pay. Justin’s Gross is $250 with the following Deductions:
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Basic Net Pay Formula (N=G-D):
Practice: Calculate Justin’s Net Pay. Justin’s Gross is $250 with the following Deductions:
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Calculation check:
Is your answer for total deduction 20% of your gross
salary?
Deductions+ Gross Pay x 20%
Basic Net Pay Formula (N=G-D):
Practice: Calculate Ryan’s Net Pay. Ryan’s Gross salary is $550 with the following Deductions:
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Basic Net Pay Formula (N=G-D):
Practice: Calculate Ryan’s Net Pay. Ryan’s Gross salary is $550 with the following Deductions:
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Calculation check:
Is your answer for total deduction 20% of your gross
salary?
Deductions+ Gross Pay x 20%
Putting it all together-1Practice: Calculate George’s Gross Pay (he worked 18 hours and his hourly pay is $10 per hour ).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
(Regular Hours)
Putting it all together-1Practice: Calculate George’s Gross Pay (his hourly pay is $10 per hour and he worked 18 hours).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
(Regular Hours)
Calculation check:
Is your answer for total deduction 20% of your gross
salary?
Deductions+ Gross Pay x 20%
Putting it all together-2Practice: Calculate Ron’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of overtime (at 1.5 hourly rate).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
Regular Hours
Overtime Hours
Total Gross Pay
Putting it all together-2Practice: Calculate Ron’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of overtime (at 1.5 hourly rate).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
Regular Hours
Overtime Hours
Total Gross Pay
Calculation check:
Is your answer for total deduction 20% of your gross
salary?
Deductions+ Gross Pay x 20%
Putting it all together-3Practice: Calculate Larry’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of holiday time (at 2x hourly rate).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
Regular Hours
Overtime Hours
Total Gross Pay
Putting it all together-3Practice: Calculate Larry’s Gross Pay (he worked 20 hours at an hourly wage of $10 per hour and worked 5 hours of holiday time (at 2x hourly rate).Then, calculate Deductions (with the percentages provided);Then, calculate Net Pay.
Gross Pay
FICA 6.20%
Medicare 1.45%
FIT 10.00%
SIT 1.50%
Total Deductions
Net Pay
Gross Pay = # Work Hours Wage ($) Pay ($)
Regular Hours
Overtime Hours
Total Gross Pay
Calculation check:
Is your answer for total deduction 20% of your gross
salary?
Deductions+ Gross Pay x 20%
Calculating Net Pay Practice
See Payroll Practice #2
EXIT TICKET:
Explain why it is important to recognize that deductions between 20-30% may be taken out of your pay.
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