Reading A Pay Stub printable pdf download

Reading a Pay Stub

CHAPTER

(1/2)

Procedure

1 Review these terms with your students:

Activity: Individual

• Pay period: Set length of time (typically weekly, bi-weekly, or monthly) over

3 0 M I N U T E S

which employee time is recorded and paid

Materials: Activity handout

• Gross pay: The amount people earn per pay period before any deductions or

Objective: The purpose of

this activity is for students

taxes are taken out.

to interpret the information

found on a pay stub. Stu-

• Net pay: Gross pay minus deductions and taxes

dents will also investigate

what employers do with

• Payroll deduction: The amounts subtracted from gross pay, which results in

money deducted from

your net pay

employee paychecks.

Financial

S TA N D A R D

• Pension: A sum of money paid regularly as a retirement benefit

Analysis Standard: Under-

stands tools, strategies

• 401(k): A retirement savings plan to which contributions are made by the

and systems used to

employee and employer and are invested; it is tax-deferred

maintain, monitor, control

and plan the use of

• FICA (Federal Insurance Contributions Act): A payroll tax used to fund

financial resources.

Social Security and Medicare

2 Have students reference the information found on the sample pay stub and have

them answer the following questions:

a What is the employee’s gross pay? $1,200.00

b How much local tax is deducted from the paycheck? $23.13

c How much state tax is deducted from the paycheck? $40.06

d How much federal tax is deducted from the paycheck? $157.39

e How much did the employee contribute to FICA? $71.69

f How much did the employee contribute to Medicare? $16.77

g How much did the employee pay for the other deductions? $91.75 (total

adjustments)

h What was the purpose of the other deductions? Health insurance and 401(k)

i What is the employee’s net pay? $809.21

j What percent of the employee’s paycheck is deducted for taxes and other

expenses? 33%

Foundations in Personal Finance High School Edition

Reading A Pay Stub

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