Getting Paid

2.3.9.G1

What are the two primary sources of

employment?

Selfemployed

Employed
by an
employer

Paid and pay

taxes
differently What sources of

employment do your family

members have?

Take Charge Today August2013 Getting Paid Slide 2

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Salary vs. Hourly

Salary

Hourly wage

Set amount of
Earn a specific rate
money
for every hour
worked
Not dependent on
Example:
the specific
number of hours
$16.00/hour
worked
Minimum wage
Example:
Federal and state
Would
you
rather
be
$30,000/year
paid a salary or
hourly wage?

Take Charge Today August2013 Getting Paid Slide 3

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What methods do employers use to pay

employees?

Paper paycheck
Direct deposit
Payroll card
Take Charge Today August2013 Getting Paid Slide 4
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Paper Paycheck and Direct Deposit

Paper paycheck

Direct deposit

Access funds by
cashing or
depositing a
check

Wages deposited
directly to
depository
institution
account

Take Charge Today August2013 Getting Paid Slide 5

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Payroll deductions
Gross
income amount of
money
earned
before
payroll
taxes

Deductions

Mandatory

Net
income
take home
pay

Optional

Take Charge Today August2013 Getting Paid Slide 6

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

What are the five main types of

taxes?

Inco
me
Payr

oll
Propert
y
Sal
es
Excis
e

Withheld
from wages

Take Charge Today August2013 Getting Paid Slide 7

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

2.3.9.G1

Why are income and payroll taxes deducted

from wages?
Helps manage tax liability on an ongoing
basis
(total tax bill)
Payroll
Payroll
deductio
deductio
n
n
End of

Beginni
ng of
year

Payroll
deductio
n

Take Charge Today August2013 Getting Paid Slide 8

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

year
total tax
liability
due

2.3.9.G1

What are the mandatory income and payroll

tax deductions?

Inco
me

Payro
ll

Federal
income
tax

Social
Security

State
income
tax

Medicare

Take Charge Today August2013 Getting Paid Slide 9

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Federal Income Tax

Largest required deduction
Amount
of money
earned

Informati
on on
Form W4
How do you benefit
from paying federal

Amount
deducted

Take Charge Today August2013 Getting Paid Slide 10

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Starting a New Job

To receive a paycheck, an employee
must:
Complete a Form W-4
Employees Withholding Allowance
Certificate

Take Charge Today August2013 Getting Paid Slide 11

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What is a Form W-4?

Marital
status

Number
of
allowanc
es

Determines
the
percentage
of pay that
will be
deducted for
federal
income
taxes

Take Charge Today August2013 Getting Paid Slide 12

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Take Charge Today August2013 Getting Paid Slide 13

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Form W-4 Allowances

Allowance

May claim
an
allowance
only if no
one else
claims that
person as a
Rule of
dependent
thumb =
may (but
not
required)
claim an
allowance
for every

Dependent
- person
who relies
on the
taxpayer for
financial
support

Take Charge Today August2013 Getting Paid Slide 14

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

Qualifying
child

Qualifying
adult
relative

2.3.9.G1

Allowances
Number
of
allowanc
es
claimed

Federal
income
tax
deducte
d

Federal
income
tax
liability

Individuals may change their Form W-4 at any time

Take Charge Today August2013 Getting Paid Slide 15

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

State Income Tax

All states EXCEPT:
Alaska, South Dakota,
Texas, Washington,
Florida, New
Hampshire, Wyoming,
Tennessee

Amount
deducted varies
between states
Colorado
State Income
Tax=4.63% flat
tax

Take Charge Today August2013 Getting Paid Slide 16

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What

exactly
is FICA??
Federal
Insurance
Contribution
Act

Funds

both

Social
Security and
Medicare

Take Charge Today August2013 Getting Paid Slide 17

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

FICA

was passed
into law in 1935
--Meant to provide
basic income to
elderly, disabled,
orphans, widows

Take Charge Today August2013 Getting Paid Slide 18

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

Some people feel it is a

contribution to an insurance
policy that will provide
minimal income if you can
no longer provide for
yourself or your family.

Take Charge Today August2013 Getting Paid Slide 19

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

Click icon to add picture

Other people believe

it is an unfair tax
because it is
mandatory.

2.3.9.G1

What is Social Security?

Provides
Income for:
o Retirees
o People with
profound
disability
o Children who
have lost a parent
o A person with
children who has
experienced the
death of a spouse

Tax
deducted
from wages
6.2%
Up to an annual
maximum
Paid by each
worker and
matched by
employer

Take Charge Today August2013 Getting Paid Slide 21

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What is Medicare?

Provides
Helps pay for
health care for
individuals 65
and older

Tax
deducted
from wages

1.45%
No limit
Paid by each
worker and
matched by each
employer

Take Charge Today August2013 Getting Paid Slide 22

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What are optional payroll deductions?

Employee
benefits
products or
Employees
services that add
portion of the
extra value for
cost is deducted
employees
beyond wages
earned will typically pay much
Employee
less than privately purchasing that
same benefit.

Insurance

Retirement plans
Flexible spending
accounts

Take Charge Today August2013 Getting Paid Slide 23

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

How Employers Further Support Employees

Workers
compensati
on
Helps pay
medical
expenses if you
are injured on
the job

Unemploym
ent
insurance
You can receive
this if you lose
your job due to
no fault of your
own

Both required at no cost to the employee

Take Charge Today August2013 Getting Paid Slide 24

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

How Employers Further Support Employees

Paid or unpaid
days for
illness,
personal,
holidays

Match
contributions
to Social
Security and
Medicare

Take Charge Today August2013 Getting Paid Slide 25

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

What is a pay stub?

Employee Information

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

Pay stub - outlines the

deductions made to wages

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions

Why is it important
to review your pay
stub?

Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 26

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
Personal
10
15
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1
Employee Information

Pay Stub

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

Name
Standard
Employee
Information

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions

Address
Identification
number

Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 27

Personal
10 America Institute
15 at the
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer
Sciences Take Charge
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1

Pay Stub

Pay
Period

Regular schedule
that employers pay
employees
Weekly, bi-weekly,
bi-monthly, or
monthly
Why is the pay period
different than the pay

Employee Information

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary
Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 28

Personal
10 America Institute
15 at the
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer
Sciences Take Charge
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1
Employee Information

Pay Stub

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

income
Net income

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Gross

Current
Amount this
pay period

Year-to-date
(YTD)
Amount from
January 1 to
last day of
current pay
period

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 29

Personal
10 America Institute
15 at the
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer
Sciences Take Charge
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1

Pay Stub

Earnin
gs
How
wages
were
calculated
May show
current
and YTD

Employee Information

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary
Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 30

Personal
10 America Institute
15 at the
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer
Sciences Take Charge
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1

Pay Stub

Employee Information

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

Deductions

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings

All deductions from

gross income
What are examples
of deductions?

Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 31

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
Personal
10
15
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1

Pay Stub

Employee Information

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

Employer
contributi
ons

Amount the
employer has
contributed to
various employee
benefits and other
contributions.

What contributions
are included?

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide 32

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
Personal
10
15
University of Arizona

Sick

Used
Curren
t

Used
YTD

Ending Balance

10

2.3.9.G1
Employee Information

Pay Stub

Pay Date:
6/11/2013

Name

Identification Address
Number

Pay
Rate

Joe Beakens

00112233

$15.00

293
Michael
Grove

Pay Period
5/1 5/31/2013

Summary

Employee Leave
Balance
Summary of the
employees leave time
Sick

Vacati
on

Holida
ys

Gross Income

Total
Personal
Deductions

Net Income

Current

$2,400.00

$747.00

$1,653.00

YTD

$12,000.00

$3,735.00

$8,265.00

Earnings
Type

Rate

Hours

Current

Regular

$15.00 160

$2,400.00 $12,000.00

Overtime

YTD
0

Deductions
Type

Personal
Deduction

Employer Contribution

Federal income tax

$249.40

State income tax

$100.00

Social Security and

Medicare

$183.60

$183.60

Retirement plan

$144.00

$144.00

Health insurance

$100.00

$400.00

Workers compensation

$13.80

Unemployment insurance

$6.26

Employee Leave Balances

Type

Beginning
balance
current

Beginning
balance YTD

Take Charge Today August2013 Getting Paid Slide

33
Personal
10
15
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
Sick
5
5
University of Arizona

Used
Curren
t

Used
YTD

Ending Balance

10

Can an employer pay employees

cash?
Ensure employer is deducting income and payroll taxes from
wages paid in cash
Are not managing your tax liability
Will be responsible for tracking the
If taxes are
not
amount of money made and paying
deducted
those taxes
from your
Are probably not receiving workers
wages you:
compensation and unemployment
insurance coverage
Consult a tax professional to
determine if you should pay taxes on
cash earned.
Take Charge Today August2013 Getting Paid Slide 34
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona

2.3.9.G1

2.3.9.G1

Summary
Employers make
deductions to
wages (outlined
on the pay stub)

Deducting
payroll and
Being employed
income taxes on
provides
a pay as you
additional
go system helps
benefits beyond
manage tax
wages earned
liability
Employers may

Employers are
required to pay
unemployment
insurance and
workers
compensation

offer employee
benefits that
save the
employee
money

Take Charge Today August2013 Getting Paid Slide 35

Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the
University of Arizona