Wage gap after collegeWage gap after college

http://lifeinc.today.com/_news/2012/10/23/14649785-wage-gap-starts-right-after-college-research-shows?litehttp://lifeinc.today.com/_news/2012/10/23/14649785-wage-gap-starts-right-after-college-research-shows?lite

Chapter 8 Chapter 8 Income and TaxesIncome and Taxes

Objectives:Objectives:

Types of incomeTypes of income Regulations affecting Regulations affecting

paypay Examples of benefitsExamples of benefits Employment Employment

classifications and classifications and effect on pay effect on pay

In 2009, 38% of wives out-In 2009, 38% of wives out-earned their husbands.earned their husbands.

http://www.mnn.com/money/personal-finance/blogs/more-women-are-earning-more-than-their-husbands http://www.mnn.com/money/personal-finance/blogs/more-women-are-earning-more-than-their-husbands

Of women with children:36% felt their higher earnings had a negative effect on their marriage

8.1 Types of Pay8.1 Types of Pay Earned Income: Earned Income: money received for doing your job. money received for doing your job.

SalarySalary: : Set amount of money paid for certain period of time. Set amount of money paid for certain period of time. ex: $45,000 a yearex: $45,000 a year

*highly skilled, supervisory positions, which involve more *highly skilled, supervisory positions, which involve more responsibilityresponsibility

WagesWages: : Set amount for every hour of work. ex: $10/hourSet amount for every hour of work. ex: $10/hour

*up to 40 hours a week same hourly rate. *up to 40 hours a week same hourly rate.

Time over 40 hours qualify for overtime 1.5 x hourly rate.Time over 40 hours qualify for overtime 1.5 x hourly rate.

Beginner or unskilled workers make Minimum wage. Highly Beginner or unskilled workers make Minimum wage. Highly skilled, experienced workers have higher wages.skilled, experienced workers have higher wages.

8.1 con’t8.1 con’t

CommissionCommission percentage of sales made, ex: 10% of salespercentage of sales made, ex: 10% of sales Encourage employees to sell more—real estate agents, insurance agents, Encourage employees to sell more—real estate agents, insurance agents,

retail sales. Some may receive a base salary + commission.retail sales. Some may receive a base salary + commission.

PieceworkPiecework: : paid fixed amount for reach piece of work paid fixed amount for reach piece of work completed ex: $12.00 per basket. (Must be paid no less than completed ex: $12.00 per basket. (Must be paid no less than minimum wage if qualifies.)minimum wage if qualifies.)

TipsTips: : ex:15%-20% of bill for good serviceex:15%-20% of bill for good service

BonusBonus: : extra pay in addition to wage/salary. extra pay in addition to wage/salary. Incentives, and End of Year bonus, Sign on Bonus.Incentives, and End of Year bonus, Sign on Bonus.

Fringe BenefitsFringe Benefits: extra financial rewards.: extra financial rewards.

Tips and BonusesTips and Bonuses

Do you owe taxes on Do you owe taxes on tips and bonuses?tips and bonuses?

Tips and BonusesTips and Bonuses

Do you pay taxes on Do you pay taxes on tips and bonuses?tips and bonuses?

Yes. Yes. Tipped employees Tipped employees

earn $4.95/hr wage. earn $4.95/hr wage. Report tips for tax Report tips for tax purposes.purposes.

Bonuses:Bonuses:

Bonus amounts Bonus amounts typically depend typically depend on on company profitscompany profits your length of time your length of time

with the company.with the company. May vary from year May vary from year

to year.to year. Ex: Cash or Ex: Cash or

Jelly of the Month Jelly of the Month club.club.

Fair Labor Standards ActFair Labor Standards Act

Same work, same pay.Same work, same pay. Prevent discriminationPrevent discrimination

Fair hourly wagesFair hourly wages Minimum wage Minimum wage IL $8.25IL $8.25 Sub-minimum wage Sub-minimum wage :: IL Employers may pay anyone under the IL Employers may pay anyone under the

age of 18 50age of 18 50¢¢ less. less. http://www.illinois.gov/idol/Laws-Rules/FLS/Pages/minimum-wage-law.aspx http://www.illinois.gov/idol/Laws-Rules/FLS/Pages/minimum-wage-law.aspx

OvertimeOvertime

Over 40 hours/weekOver 40 hours/week 1.5 x hourly rate1.5 x hourly rate

Salaried employees Salaried employees excluded.excluded.

Fringe benefits Fringe benefits important to consider important to consider when deciding which job to accept.when deciding which job to accept.

Health, dental, vision, life insurance plansHealth, dental, vision, life insurance plans Savings/retirement plansSavings/retirement plans Paid holidaysPaid holidays Sick leave, bereavement (relatives funerals)Sick leave, bereavement (relatives funerals) Tuition reimbursementTuition reimbursement Company carCompany car DiscountsDiscounts Gym memberships, daycare, etc.Gym memberships, daycare, etc. Ex: Wesclin teachersEx: Wesclin teachers

13 sick days/year (accumulate for service years)13 sick days/year (accumulate for service years) 3 personal days ( if unused paid for)3 personal days ( if unused paid for) Tuition reimbursement--$100/credit hourTuition reimbursement--$100/credit hour

Employment classificationsEmployment classifications Full-timeFull-time: 35+ hours/week: 35+ hours/week

Qualify for other company benefitsQualify for other company benefits..

Part-timePart-time:: under 35 hrs/wk. Most do not qualify for under 35 hrs/wk. Most do not qualify for benefits.benefits.

BLS-Of the nearly 1,000,000 jobs the economy has created BLS-Of the nearly 1,000,000 jobs the economy has created since the first of the year, only 222,000 of them were full-since the first of the year, only 222,000 of them were full-time. Put another way, three out of four jobs created since time. Put another way, three out of four jobs created since January 1,2013 have been part-time.January 1,2013 have been part-time.

TempsTemps:: Short term assignments. No benefits. Short term assignments. No benefits. Hired through temp agency, cheaper for employers.Hired through temp agency, cheaper for employers.

ContractContract: : Hired for specific period to complete project. Hired for specific period to complete project. No company benefits.No company benefits.

Computer labComputer lab

Make your Make your paystub;)paystub;)

Complete the Cupcake Complete the Cupcake company worksheet.company worksheet.

8.2 Understanding 8.2 Understanding paycheckspaychecks

How would you like to How would you like to get paid?get paid? WeeklyWeekly Bi-weekly (2 weeks)Bi-weekly (2 weeks) MonthlyMonthly

Direct Deposit-Direct Deposit- check check goes directly into your goes directly into your specified bank account. specified bank account.

*receive money faster. No *receive money faster. No trip to bank.trip to bank.

WhatWhat’’s on a pay stub?s on a pay stub?

Employee identificationEmployee identification Pay periodPay period Earnings: hours x rate of Earnings: hours x rate of

paypay YTD= year to dateYTD= year to date T/P= this pay periodT/P= this pay period

How did your Net Pay How did your Net Pay compare to your Gross compare to your Gross Pay?Pay?

How much was taken out? How much was taken out? Divide Divide ““current deductionscurrent deductions”” by by ““current amountcurrent amount””

what % is it?what % is it?

How long are you working in order to just pay your How long are you working in order to just pay your deductions??deductions?? Take annual salary x % of Take annual salary x % of deductions. How long does it take you to make deductions. How long does it take you to make that amount of money? that amount of money?

Who is Who is ““FICAFICA””?! ?!

Social SecuritySocial Security (FICA): Pays retirement, (FICA): Pays retirement, survivors, disability benefits.survivors, disability benefits.

MedicareMedicare (FICA): Helps pay medical (FICA): Helps pay medical expenses for those that qualify- expenses for those that qualify-

““Federal Insurance Contributions ActFederal Insurance Contributions Act””

Other Taxes:Other Taxes:

Federal & State Federal & State Taxes: Help pay for Taxes: Help pay for schools, roads, schools, roads, Parks, Law Parks, Law enforcement, etc.enforcement, etc.

Should you pay higher Should you pay higher tax rates if you make tax rates if you make more $?more $?

http://www.bargaineering.com/articles/http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html federal-income-irs-tax-brackets.html

2013 Official Tax Brackets2013 Official Tax Brackets

Is being Is being ““Paid under the TablePaid under the Table””

a good idea?a good idea?

Concerns of Concerns of ““Paid under the Paid under the tabletable””

not offering you any of the not offering you any of the benefitsbenefits to which to which you might be entitled, you might be entitled,

youyou’’re probably re probably not coverednot covered for purposes of for purposes of workerworker’’s compensations compensation or or unemploymentunemployment. .

YouYou’’re definitely re definitely not paying in to Social not paying in to Social Security. Security.

No Proof of income-No Proof of income- difficult to get loans, difficult to get loans, credit with no pay stubs.credit with no pay stubs.

What President started What President started income taxes? Why?income taxes? Why?

What President started What President started income taxes? Why?income taxes? Why?

To help fund theTo help fund the

Civil War, 1863.Civil War, 1863.

Taxed on annual incomeTaxed on annual income

Over $800.Over $800.

18951895 Ruled Income TaxRuled Income TaxUnconstitutionalUnconstitutional

1913 Woodrow Wilson1913 Woodrow Wilson’’s term,s term,

1616thth Amendment allowed Gov Amendment allowed Gov’’t to t to collect income taxes.collect income taxes.

19301930’’s FDR increased taxes to help s FDR increased taxes to help pay for SOCIAL SECURITY.pay for SOCIAL SECURITY.

referencesreferences

http://en.wikipedia.org/wiki/http://en.wikipedia.org/wiki/List_of_U.S._minimum_wagesList_of_U.S._minimum_wages

NEFE high school financial planNEFE high school financial plan

Where does all my money Where does all my money go??go??

Gross PayGross Pay: total amount : total amount of money earned.of money earned.

Net PayNet Pay: (take home pay) : (take home pay) Amount of pay AFTER Amount of pay AFTER taxes and other taxes and other deductions are taken out.deductions are taken out.