VOCABULARY
forms of financial compensation linked to employee performance
Bonuses/Incentives
document employees use to report their income taxes annually
Form 1040
Gross Wage
amount an individual makes prior to any deductions
Sheila makes $12.50 per hour. Calculate her Gross earnings for a 40-hour week
$500
sum of money paid to an employee upon the completion of a task
Commission
document which verifies the identity and eligibility of an employee to work in the United States
Form I-9
Net Pay
total amount an employee is paid after all deductions
Markus makes $65,500 annually. Calculate his earnings assuming he is paid on the 1st and 15th of every month. What is his gross pay per paycheck?
$2,729.17
(65,500/12=5458.33/2=2729.17)
systematic method for providing monetary and non-monetary value to employees in exchange for services provided to the organization
Compensation
federal income tax document employers file for each employee providing information on wages and taxes withheld
Form W-2
Paycheck Stub
document provided to employees every pay period detailing their earnings
Blake makes $125.00 per hour. Calculate her Net earnings for working for 6 hours per week. You need to find the monthly pay assuming there are 4 weeks in a month. She has random monthly expenses of $200. She also has $1050 due for rent.
$1750
(125.00*24=3,000-200-1050)
employer account in which individuals can set aside money to use for qualified healthcare expenses
Flexible Spending Account
mandatory document informing employers how much they need to deduct from a paycheck for federal income tax
Form W-4
Wages
compensation paid to working employees
Sherry is paid $16.50 during regular hours and $24.75 per hour overtime. She worked 80 hours regular time and 10 hours overtime. Calculate her earnings.
$1,567.50
(16.50*80+24.75*10=1567.50)
personal account in which individuals can set aside money to use for qualified healthcare expenses
Health Savings Account
used to report the distribution of retirement benefits such as pensions, annuities or other retirement plans.
Form 1099-R
Withholdings
amount of an individual’s wages which are not included in a paycheck
Eric makes $85,000 annually. Calculate his yearly earnings. He has the following taxes and other deductions.
SST- $5,233
ST- $0.00
MEDICARE-$ 1,224
FED-$12,469
Deductions:
Retirement-$900.00
Health Insurance- $ 600.00
$64,574.00