1 3 4 G 1 Paycheck Basics 1

1. 3. 4. G 1 Paycheck Basics 1. 3. 4. G 1

1. 3. 4. G 1 What’s the best part about having your first job? FOR MANY IT’S THE FIRST PAYCHECK. Before payment occurs there are steps to complete. What do you plan to do with your first big paycheck?

1. 3. 4. G 1 W-4 Must be completed To receive a paycheck, an employee must: Complete a Form W-4 • Employee’s Withholding Allowance Certificate • Determines the amount of money withheld for taxes © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 What are taxes? REQUIRED CHARGES OF CITIZENS BY LOCAL, STATE AND FEDERAL GOVERNMENTS What are examples of goods and services Provide public goods and services. that are paid for with taxes?

1. 3. 4. G 1 I-9 must be completed Completing a Form I-9 • Used to prove citizenship • Must provide at least 2 of the following – passport – driver’s license – U. S. military card – Social Security card – birth certificate What forms of ID do you have to complete the I-9? © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 W-2 is completed at the end of the tax year Form W-2 (Wage and Tax Statement) • States the amount of money earned and taxes paid throughout the previous year • Used to file income taxes by April 15 th • Individuals may be exempt from filing federal withholdings if they make less than a certain amount per year How many businesses in our community advertise to help with this process? © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Methods for Paying Employees Paycheck Direct Deposit • Paper check with stub • Least secure payment method because the employee is responsible for handling the paycheck • Employers directly deposit employee’s paycheck into the authorized employee’s bank account Payroll Card • A payroll card electronically carries the balance of the employee’s net income © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Paycheck Pros and Cons Pros Cons • Touch and feel the • Least secure method payment • Employee responsible to • Employee controls when get it to the bank it is deposited • Fees may apply if a person is unbanked © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Direct Deposit Pros and Cons Pros • No direct handling of check • Won’t get lost • Employee knows exactly when money will be in account Cons • No direct handling of the check • Must check online for accuracy of paycheck stub © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Payroll Card Pros and Cons Pros • No direct handling of check • Wages automatically loaded on card • Works like a debit card Cons • Card could be lost • Fees may be charged © Take Charge Today – November 2014 – Paycheck Basics – 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

Reading a Paycheck Stub 1. 3. 4. G 1 Personal Information: Name, SSN or Employee Number & Address © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Personal Information Employee’s full name, address, and social security number or employee identification number Pay Period -The length of time for which an employee’s wages are calculated Most businesses pay employees either weekly, biweekly, or monthly © Take Charge Today – November 2014 – Paycheck Basics – 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

Reading a Paycheck Stub Pay Period: The length of time for which an employee earns wages © Take Charge Today – November 2014 – Paycheck Basics – 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 1. 3. 4. G 1

Reading a Paycheck Stub Gross Income: The total amount of money earned before payroll withholdings © Take Charge Today – November 2014 – Paycheck Basics – 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 1. 3. 4. G 1

1. 3. 4. G 1 Number of hours worked Wage Gross Income If a person earns an hourly wage, gross income is calculated by multiplying the number of hours worked by the wage What is the gross income if an employee works 15 hours at an hourly wage of $9. 50?

Reading a Paycheck Stub Payroll Deductions: Items deducted from gross pay. Typically around 30%. Typically include: • Federal withholding • State withholding • FICA © Take Charge Today – November 2014 – Paycheck Basics – 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 1. 3. 4. G 1

1. 3. 4. G 1 Reading a Paycheck Stub Deductions this pay period Accumulated deductions for the year © Take Charge Today – November 2014 – Paycheck Basics – 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

Payroll Deductions –Withholding Tax – The amount required by law for employers to withhold from earned wages to pay taxes –FICA-Federal Insurance Contribution Act • Fed OASDI/EE (Federal Old Age Survivors Disability Insurance Employee Employment Tax) or Social Security helps provide retirement income for the elderly and pays disability benefits • Fed MED/EE (Federal Medicare Employee Employment Tax) or Medicare - health care program for the elderly and disabled © Take Charge Today – November 2014 – Paycheck Basics – 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 1. 3. 4. G 1

Reading a Paycheck Stub Net Income: The check amount that is often referred to as the take home pay. © Take Charge Today – November 2014 – Paycheck Basics – 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 1. 3. 4. G 1

1. 3. 4. G 1 Net Income THE AMOUNT LEFT AFTER ALL PAYROLL DEDUCTIONS HAVE BEEN TAKEN FROM GROSS INCOME Often referred to as “take home” pay

1. 3. 4. G 1 Net Income Payroll Withholdings – Gross Income $180. 00 – Payroll Withholdings: • Federal Withholding Tax $14. 10 • State Withholding Tax $5. 45 • FICA $13. 77 • What is her Net Income? Net Income $180. 00 – ($14. 10 + $5. 45 + $13. 77) = $146. 68

1. 3. 4. G 1 Review each pay period • It is important to review each paycheck stub to identify any possible mistakes! – If a mistake is found, contact the employer immediately © Take Charge Today – November 2014 – Paycheck Basics – 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

1. 3. 4. G 1 Questions? © Take Charge Today –August 2014 – Planet Paycheck– 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 © Take Charge Today – November 2014 –Paycheck Basics– 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 1. 3. 4. G 1