Welcome to the Real World (Part 1)

​EXAMINE THIS PAYCHECK: This person makes $22 p/hr, & worked 80 hours (2 weeks full-time).

The GROSS pay for the period is $22•80 hours = $1760.00.

The NET pay is the amount of the paycheck, after all the deductions... or $1,362.65

The amount if deductions taken out for taxes this pay period is $397.35.​

• Health Insurance / Dental

• Disability

• Child Support

• Retirement Savings

• Child Care ​

​

​

Other Possible Deductions: ​

• Federal income tax

• State income tax

• CITY tax (like NYC or Philly)

• FICA​ (Social Security/ Medicare)

• Unemployment​ Insurance

​Types of Taxes:

Gross pay = $457

Total tax Deductions = $81.50​​

% tax = 81.50 / 457 = 0.1783

= 17.83% or about 18%​

​

Net pay = $457 - $81.50 = $375.50

% Net pay = $375.50 / $457 (net/gross)

= about 72%​

Or try this one:

​% of taxes taken out =

$397.35/ $1,760 = ​0.2258 = 22.58% (move two decimal places)

so​

about 23% taken out in taxes!

​So for the last example:

To figure out the percentage of tax taken out:

% of taxes = DEDUCTIONS ÷ GROSS

% of net pay = Net Pay ÷ gross​

$365 / $1645 = 0.22​

Once you know about what percentage is taken out in taxes each paycheck, you can begin to estimate how much will be taken out in general and what your Net pay will be depending on how much you work.

​READ this Example:

You make $18 an hour. You are scheduled for 35 hours this week and 20 hours next week. You know you have about 26% taken out in taxes. You can calculate each of the following: Gross pay, Amount of Deductions, Net Pay (Take-Home Pay)

Some text here about the topic of discussion

You make $18 an hour. You get a paycheck every two weeks.

You are scheduled for 35 hours this week and 20 hours next week.

You have about 26% taken out in taxes. Calculate each of the following:

Gross Pay, Amount of Deductions, Net pay​

Solutions:

First: 35 hrs + 20 hrs = 55 total hours for the pay period.​

Gross Pay = $18•55 hours = $990

Amount of Deductions: 26% of $990 = 0.26 • $990 = $257.40​

Net pay (Take Home Pay) = $990 - 257.40 = $732.60​

Some text here about the topic of discussion