Pay Types
What is the difference between hourly pay and salary pay?
What is a bi-weekly pay schedule?
A bi-weekly pay schedule pays employees every two weeks. 26 pay periods.
If an employee has a gross pay of $3,000 and deductions of $600, what is their net pay?
If gross pay is $3,000 and deductions are $600, the net pay is $2,400.
Michelle is a marketing manager earning $92,400 annually.
She files as single and is paid bi-weekly.
What is her federal withholding?
$92,400 ÷ 26 = $3,553.85
Federal: $461 pg.18
How do you convert 25% to a decimal?
25% as a decimal is 0.25
What is considered overtime in most jobs?
Overtime is typically considered any hours worked over 40 hours in a week.
How does a semi-monthly pay schedule differ from a monthly pay schedule?
A semi-monthly pay schedule pays employees twice a month, while a monthly pay schedule pays once a month.
Give an example of a pre-tax deduction.
An example of a pre-tax deduction is contributions to a 401(k) retirement plan.
Carlos is paid $4,000 semi-monthly as a project manager and files as head of household.
What is his Federal withholding?
Federal $388 pg. 21
What is the decimal equivalent of 10%?
10% as a decimal is 0.10.
What are the eligibility criteria for receiving overtime pay?
Eligibility criteria include an employee who works over 40 hours in a week.
What are the advantages of getting paid weekly?
Advantages of getting paid weekly include improved cash flow and budgeting ease. 52 pay periods
How do pre-tax deductions affect taxable income?
Pre-tax deductions reduce taxable income, lowering overall tax liability.
Robert earns $28.75 per hour as an electrician, working 40 hours per week.
He files married jointly and is paid weekly.
What is his federal withholding per paycheck?
$28.75 x 40 = $1,150
Federal Withholding: $60
Convert 5% to a decimal.
5% as a decimal is 0.05.
Describe how overtime pay affects a worker's earnings.
Describe how pay schedules can affect budgeting.
Pay schedules can affect budgeting due to the frequency of income received.
Sarah is a single software developer earning $85,000 annually.
She is paid semi-monthly.
How would you calculate her federal withholding per paycheck using the 2025 tables?
Sarah Johnson (Single, Semi-monthly, $85,000 annually)
Semi-monthly salary: $3,541.67
Federal Withholding: Approximately $429
Janet earns $75,000 annually and is paid semi-monthly. She claimed married filing separately on her Form W-4 and has pre-tax deductions of $200 for medical insurance and contributes 5% to her 401(k). Determine Janet's Federal withholding along with the amount of FICA to be deducted from her paycheck.
Gross Pay:_
FICA:_
Medical Insurance: _
401(k) Contribution:_
Sum of all Pre-Tax deductions: _
Adjusted Gross Pay after Pre-tax deductions: _
Federal Withholding:_
Gross Pay: $75,000 ÷ 24 = $3,125.00
FICA: $3,125.00 x 0.0765 = $239.06
Medical Insurance: $200.00
401(k) Contribution: $3,125 x 0.05 = $156.25
Sum of all Pre-Tax deductions: $200.00 + $156.25 = $356.25
Adjusted Gross Pay after Pre-tax deductions: $2,768.75
Federal Withholding: $259.00 pg. 21
Why is it important to understand percent-to-decimal conversions in financial literacy?
Understanding percent-to-decimal conversions is crucial for calculations in financial literacy, including taxes and contributions.
How do you calculate net pay from gross pay?
Net pay is calculated by subtracting deductions/taxes from gross pay.
James is a single construction manager with a bi-weekly salary of $2,100.
How many paychecks will he receive in a year?
What is his annual salary?
Bi-weekly = 26 pay periods
$2,100 x 26 = $54,600
Marcus works as a nurse earning $72,400 annually.
He files married jointly and is paid semi-monthly.
Explain why this gross pay is incorrect.
$2,784.62 per pay period
Marcus Rodriguez (Married Filing Jointly, Weekly, $72,400 annually)
Semi-monthly ≠26 pay periods
Semi-monthly = 24 pay periods
$2,784.62 was calculated using a bi-weekly pay period.
$72,400 ÷ 26 = $2,784.62
The correct salary
$72,400 ÷ 24 = $3,016.67
Maggie earns $62,000 annually and is paid bi-weekly. She claimed head of household on her Form W-4 and has pre-tax deductions of $65 for medical insurance and contributes 3% to her 401(k). Determine Maggie's Federal withholding along with the amount of FICA to be deducted from her paycheck.
Gross Pay:_
FICA:_
Medical Insurance: _
401(k) Contribution:_
Sum of all Pre-Tax deductions: _
Adjusted Gross Pay after Pre-tax deductions: _
Federal Withholding:_
Gross Pay: $62,000 ÷ 26 = $2,384.62
FICA: $2,384.62 x 0.0765 = $182.42
Medical Insurance: $65
401(k) Contribution: $2,384.62 x 0.03 = $71.54
Sum of all Pre-Tax deductions: $65.00 + $71.54 = $136.54
Adjusted Gross Pay after Pre-tax deductions: $2,248.08
Federal Withholding: $154 pg. 17
Convert the FICA percentage into a decimal.
FICA taxes are calculated as a percentage of gross wages, currently at 6.2% for Social Security and 1.45% for Medicare.
FICA: 7.65% = 0.0765