Computing Deductions on Your Paycheck Joe Beakens Joe

Computing Deductions on Your Paycheck

Joe Beakens �Joe works at a small office and makes $15 dollars an hour. He is paid monthly. Let’s figure out Joe’s deductions. ◦ If Joe works 160 hours per month, what should his GROSS income on his paycheck be? ◦ If he is getting paid for the month of May, what should his Year to Date gross income be?

Joe’s Gross Income � 15*160=$2400 �$2400*5=$12, 000

Joe’s Deductions �If 6. 5% of his paycheck goes to Social Security, how much is that deduction? ◦ $2400*6. 2% OR (2400*. 062) � 1. 45% of Joe’s paycheck should be kept for medicare. How much is that deduction? ◦ 2400*. 0145 �Sometimes these deductions may be listed together on the paystub. What is the total of these deductions?

�Social Security=$148. 80 �Medicare = $34. 80 �TOTAL DEDUCTIONS= $183. 60

Employee Deductions �Joe chooses to utilize the benefits of health insurance and retirement savings from his employer. His insurance deducts 6% of his check and his retirement plan deducts 5% every paycheck. How much are these deductions? ◦ 2400*. 06 ◦ 2400*. 05 � 2400*. 06=$144 � 2400*. 05=$120 ◦ Total Deductions are $264

� 2400*. 06=$144 � 2400*. 05=$120 ◦ Total Deductions are $264

Federal & State �If Joe has $249. 40 for federal tax taken out and $100. 00 for state income taken out, combined with all other deductions; what is Joe’s net pay? � 249+100+144+120+183. 60=$796. 60 ◦ 2400 -796. 60=$1603. 40