Library

1.2 Your Paycheck 9/8/23

By Jennifer Pariseau
Last updated about 2 months ago
24 Questions
Note from the author:
OBJECTIVES & STANDARDS
Math Objectives
  • Calculate percentages
Common Core Math Standards
  • Link to all CCSS Math
  • CCSS.PRACTICE.MP6
  • CCSS.7.RPA.A.3
Personal Finance Objectives
  • Read a pay stub
  • Complete a W-4
  • Identify common payroll deductions
National Standards for Personal Financial Education
Earning Income
  • 6a: Identify which level(s) of government typically receive(s) the tax revenue for income taxes, payroll taxes, property taxes, and sales taxes
  • 7c:  Differentiate between gross, net, and taxable income
  • 8a: Explain the difference between earned and unearned income
  • 9a: Complete IRS Form W-4
OBJECTIVES & STANDARDS
Math Objectives
  • Calculate percentages
Common Core Math Standards
  • Link to all CCSS Math
  • CCSS.PRACTICE.MP6
  • CCSS.7.RPA.A.3
Personal Finance Objectives
  • Read a pay stub
  • Complete a W-4
  • Identify common payroll deductions
National Standards for Personal Financial Education
Earning Income
  • 6a: Identify which level(s) of government typically receive(s) the tax revenue for income taxes, payroll taxes, property taxes, and sales taxes
  • 7c:  Differentiate between gross, net, and taxable income
  • 8a: Explain the difference between earned and unearned income
  • 9a: Complete IRS Form W-4
Intro
INTRO
VIDEO: FinCap Friday: That's Gross!
In this video, Yanely discusses your paycheck and why it’s so important for you to understand how to read it.  After watching the video, answer the questions below.

What type of information should you see when you look at your paystub?

Why is it important for you to understand how to read your pay stub?

Learn It 1
ARTICLE: Types of Income
You can earn money in a lot of different ways. Read the article about types of income and answer the questions.

What is the main difference between salary and wage work?

What are two ways that you can earn income without working?

VIDEO: Filling Out the W-4 Form
A W-4 form is completed when you start a new job so that your employer knows how to calculate your federal tax withholdings. Watch the video about completing a W-4 and use it to answer the questions.

What steps of the W-4 are required for every employee?

Which step must you fill out if you have multiple jobs?

ARTICLE: What are Payroll Deductions?

TEACHER TIP: This article covers the basics of payroll deductions but does not address some specifics:
  1. Social Security taxes have a maximum taxable income limit, which may affect the 7.65% payroll tax
  2. Employees have to pay additional Medicare taxes if they make over a certain income level and file as unmarried, which may affect the 7.65% payroll tax
  3. Federal income tax applies to many different forms of income, not just wages.
There are many different types of payroll deductions.  Some are required while others are voluntary.  Read the article and use it to answer the questions about payroll deductions.

What are payroll deductions?

Which deductions will everyone see on their paycheck?

Why might someone voluntarily have money deducted from their paycheck?

EDPUZZLE: How to Read a Pay Stub
A pay stub details your earnings, taxes, voluntary deductions, and many pieces of important information. Watch this video to learn more about how to read a pay stub. Then, answer the questions either in EdPuzzle or below.

What is the difference between gross pay and net pay?

A. Net pay is before taxes and deductions are subtracted; Gross pay is your take-home pay
B. There is no difference between gross and net pay
C. Gross pay is before taxes and deductions are subtracted; Net pay is your take-home pay

What are pre-tax deductions and contributions?
A. Contributions taken out of your paycheck AFTER taxes are calculated on your income
B. Contributions taken out of your paycheck BEFORE taxes are calculated on your income

What are two examples of Employer Contributions?
A. Health Insurance & 401k
B. 401k & Roth IRA
C. Federal & State Taxes
D. Traditional & Roth IRA

MATH CONNECTION - ANALYZING PERCENTAGES
Now that we understand how to read a pay stub and the types of deductions that might show up, let’s do some analysis to see how much of our gross pay is being deducted.
Carl’s Paycheck
What was Carl’s gross pay for the current pay period?_______
How much did Carl pay in taxes during the current pay period?_______
What percentage of Carl’s total gross wages was paid in taxes?_______
How much did Carl pay in FICA Social Security taxes during the current pay period?_______
What percentage of total taxes was paid in FICA Social Security taxes?_______
Alan’s Paycheck
What percentage of Alan’s gross income was deducted for health insurance?_______
What percentage of total deductions were voluntary deductions?_______
What percentage of Alan’s gross pay did he take home after all deductions?_______
Write a function that Alan can use to estimate his take-home pay, where x represents gross pay and y represents net pay._______
Exit Ticket

A W-4 is…
  1. A document that you receive from the federal government detailing total taxes owed for the year
  2. A form you fill out so that your employer can calculate how much to withhold in taxes from your paycheck
  3. A summary of your gross vs net pay including current pay periods and year to date withholdings
  4. A document used to calculate retirement and health insurance withholding

A FICA withholding on your paystub is…
  1. A retirement withholding that is taken before taxes are calculated
  2. A federal tax to cover Social Security and Medicare programs
  3. A state or local tax used to fund road and bridge improvements
  4. A special type of health insurance withholding that helps lower your total taxes owed

You made $1,265.00 in gross pay this pay period. Your net pay was $963.50. What percentage of your gross pay was withheld from your paycheck for taxes and voluntary deductions? Round to the nearest whole percentage.
  1. 11%
  2. 24%
  3. 65%
  4. 76%