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Chapter 10, Lesson 2 Activity

This document provides an overview of how to read a pay stub, including key terms such as gross pay, net pay, and payroll deductions. It includes a sample pay stub for an employee named Jane Doe, detailing her earnings, deductions, and net pay. The document also poses questions to help the reader understand the information presented in the pay stub.

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197 views

Chapter 10, Lesson 2 Activity

This document provides an overview of how to read a pay stub, including key terms such as gross pay, net pay, and payroll deductions. It includes a sample pay stub for an employee named Jane Doe, detailing her earnings, deductions, and net pay. The document also poses questions to help the reader understand the information presented in the pay stub.

Uploaded by

noelliedesigns
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Reading a Pay Stub

CHAPTER 10, LESSON 2

NAME DATE
Magnolia Vickery

DIRECTIONS
Review the key terms below. Then, use the information on the Sample Pay Stub to answer the questions that
follow. The sample employee is paid semi-monthly.

Key Terms
• Pay Period: set length of time over which employee time is recorded and paid
» Weekly (every week; 52 pay periods per year)
» Biweekly (every two weeks; 26 pay periods per year)
» Semi-monthly (twice per month; 24 pay periods per year)
» Monthly (once a month; 12 pay periods per year)
• Gross Pay: a person’s total earnings before payroll taxes and other deductions are
taken out
• Net Pay: a person’s earnings after payroll taxes and other deductions are taken out
• Payroll Deduction: the amount subtracted from gross pay, which results in your
net pay
• Pension: a sum of money paid regularly as a retirement benefit
• 401(k): a tax-deferred retirement savings plan offered by a company to its employees
who contribute money from their gross pay
• FICA (Federal Insurance Contributions Act): a payroll tax used to fund Social Security
and Medicare

FO U N DATI O NS I N PERSONA L FI NA NCE PAGE 1 O F 4


Sample Pay Stub
EXAMPLE COMPANY, INC. JANE DOE
555 MAIN STREET EMPLOYEE ID: 000004
ANYCITY, AR 12345 DEPARTMENT: 000200
DD RECEIPT: 123456789

Pay Period 09/1/2021 - 09/15/2021 FITWH Filing Status: S Exemptions: 1


Pay Date 10/01/2021 TN

Earnings RATE HOUR/UNIT CURRENT YTD HOUR/UNIT YTD


Holiday 15.00 8.00 120.00
Vacation 15.00 8.00 120.00
Regular 15.00 64.00 960.00
Total $1,200.00 $17,622.50

Deductions CURRENT YTD Taxes CURRENT YTD


HLTH 43.75 612.50 FITWH 157.39 2396.21
EXMPLCO 401K 48.00 704.90 MED 14.67 220.05
Total $91.75 $1,317.40 SOC 62.31 934.35
STATE TAX 40.06 599.12
CITY TAX 23.13 340.27
Total $297.56 $4,490.00

Net Pay XXX4444 $810.69

THIS IS NOT A CHECK. THIS DOCUMENT IS TO BE USED FOR INFORMATIONAL PURPOSES ONLY.

EXAMPLE COMPANY, INC.


555 MAIN STREET
ANYCITY, AR 12345 Direct Deposit # 123456789
Date 10/01/2021

Pay this Amount

** N O N - N E G O T I A B L E ** D I R E C T D E P O S I T R E C E I P T ** VOID ** VOID **

DIRECT DEPOSIT $810.69


000000 DD TO ACCOUNT # XXX4444
Pay to the
BANK # XXXXX1111
Order of JANE DOE
123 LAMPO DRIVE
NON-NEGOTIABLE
ANYCITY, AR 12345

FO U N DATI O NS I N PERSONA L FI NA NCE PAGE 2 O F 4


Reading a Pay Stub
CHAPTER 10, LESSON 2

1. What is the employee’s gross pay?


The employee's gross pay is $1,200.00

2. How much local tax is deducted from the paycheck?


Local tax deducts $23.13 from the paycheck.

3. How much state tax is deducted from the paycheck?


State tax deducts $40.06 from the paycheck.

4. How much federal tax is deducted from the paycheck?


Federal tax deducts $157.39 from the paycheck.

5. How much did the employee contribute to FICA?


The employee contributed $62.31 to FICA.

6. How much did the employee contribute to Medicare?


The employee contributed $14.67 to Medicare

7. How much did the employee pay for other (nontax) deductions?
A total of $91.75 for nontax deductions ($43.75 for HLTH; $48.00 EXMPLOO 401K).

8. What was the purpose of the other deductions?


The first deduction listed is set aside for health insurance and the second is for retirement.

9. What percentage of the employee’s income is set aside for retirement?


4% of the income is set aside for retirement.

FO U N DATI O NS I N PERSONA L FI NA NCE PAGE 3 O F 4


Reading a Pay Stub
CHAPTER 10, LESSON 2

10. What is the employee’s net pay?


The employee's net pay totals to $810.69.

11. What percent of the employee’s paycheck is deducted for taxes and other expenses?
32.44% of the employee's paycheck is deducted for taxes and expenses.

12. How many hours did the employee work during this pay period? How much is the
employee paid per hour?
The employee worked 64 hours and is paid $15 an hour.

13. How much does this employee pay monthly for health insurance?
The employee pays $87.50 for health insurance.

FO U N DATI O NS I N PERSONA L FI NA NCE PAGE 4 O F 4

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