Definitions
payment to federal & state government out of a person's paycheck
taxes
Social Security & Medicare taxes together
FICA
Why is it important to have health insurance?
offsets costs of doctor bills/medical expenses
Sandy is paid $12.50 per hour. She worked 39.5 hours last week. What is her gross weekly pay?
$493.75
($12.50 x 39.5 hours)
another name for "net pay"
take-home pay
amount of money earned BEFORE taxes are taken out
gross pay
contract that pays a beneficiary in the event of your death
life insurance
What is a deductible?
the amount you pay out of pocket before insurance company will cover remaining costs
Brian is paid $15.00 per hour up to 40 hours per week. He is paid $19.50 per hour for all hours over 40 hours in a week. Brian worked 45 hours last week.
What is his gross pay?
$697.50
(40 hours x $15 = $600)
(5 hours x $19.50 = $97.50)
($600 + 97.50 = $697.50)
Dave's gross pay this week is $784.00. He has Medicare taxes taken from his paycheck at a rate of 1.45% of his gross pay.
A) How much will he have deducted for Medicare taxes?
B) What will his NET PAY be after this deduction?
A) $11.37 - Medicare deduction
B) $772.63 - Net pay
amount of money earned AFTER taxes are taken out
life insurance with an end date
Term Life Insurance
Pam fell and broke her arm. Her total bill from the emergency room was $7400. Her health insurance has a listed deductible of $750.
A) How much will Pam pay?
B) How much will the insurance pay?
A) $750
B) $6650
Derek earns $19.50/hour regular hours and $22.75 for overtime (hours over 40 in a week).
What is his gross pay if he works 56.5 hours in a week?
$1155.38
Sam earns $13/hour and works 39 hours last week. He has a FICA deduction of 4.2% deducted from his paycheck.
What is Sam's net pay after the FICA deduction?
$484.87
($13 x 39 = $507, $507 x .042 = $22.13, $507 - 22.13 = $484.87)
allowances
deductions that decrease your tax obligation
form you fill out when employed that determines the percentage that is withheld for taxes
W-4
Debra was in an accident. Her deductible is $500. Her total of her medical bills was $12,700. She also has a 10% co-insurance payment she is responsible for paying.
How much will Debra pay of her medical bills?
$1720
($500 + $1220)
Cassidy works 40 hours per week. Her Gross pay is $610. What is her hourly rate that she is paid?
$15.25/hour
Jesse earns $11.50/hour and works 40 hours this week. Medicare has a rate of 1.45% and FICA has a rate of 4.2%.
What is Jesse's net pay after these two deductions?
$434.01
sets the federal withholding tax rate
IRS
a plan of how to spend your money
budget
Mark fell off a ladder and required surgery on his back. His total medical bills were $35,700. He has a $500 deductible plus a 15% coinsurance payment less the deductible.
A) How much will Mark pay?
B) How much will the Insurance pay?
A) $5780
B) $29,920
Grace earned a gross pay of $1004.25 last week. Her hourly rate is $25.75 per hour.
How many hours did she work last week?
39 hours
Brett earns $15/hour for regular hours and $20/hour for overtime (any hours over 40 in a week). If Brett works 49 hours in a week and has deductions (Medicare at 1.45% and FICA at 4.2%), what will his net pay be?
$735.93