INCOME BASICS
Money earned from working a job
earned income
Formula used to calculate hourly pay
rate × hours
Overtime usually starts after this many hours
40 hours
Fixed yearly pay
salary
The formula for take-home pay
What is gross pay − deductions = net pay?
Money from investments or gifts
unearned income
If you work more hours, your pay usually does this
it increases
Overtime pay rate
1.5× pay
Salary pay usually does NOT include this
overtime
Government tax taken from paychecks
What is federal tax?
The total money earned before deductions
gross pay
$15/hour × 20 hours
$300
$10/hour overtime rate becomes
$15/hour
Example of a salary career
teacher/manager/office job
Program that helps retired workers
What is Social Security?
The money you actually take home
net pay
Type of job where pay changes weekly
an hourly job
Why overtime costs employers more money
higher pay rate
One benefit of salary pay
What is stable paycheck?
Health program funded by deductions
What is Medicare?
Something taken out of your paycheck
deductions
A benefit of hourly pay
overtime opportunities
One downside of working overtime
less free time / burnout
Salary pay is based more on this than hours
What is responsibility or position?
Why net pay matters more than gross pay
It’s the money you can actually spend?