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How do I read a pay advice?

Understanding your paycheck deductions

Karen Vohs

on 17 May 2010

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Transcript of How do I read a pay advice?

Pay Check Scavenger Hunt Medical Benefits Social Security Medicare FICA Federal Insurance Contribution Act Federal Tax used to fund
Social Security & Medicare Medicare provides health insurance to retired people The Medicare tax rate is 1.45%
If your gross pay is $1000.00 then
your medicate tax would be 1000 X 0.0145
or $14.50. The Social Security tax is used to fund retirement and disability benefits. When you retire you will be eligible to receive social security. The social security tax
rate is 6.2% of your pay for an employee. Your employer also contributes 6.2%. If you are self-employed you pay the entire 12.4% Insurance costs vary but for a single person in good health will be from $60.00 to $150.00 per month. Gross Pay Goss Pay is the total amount of money you earn during a pay period before any taxes or other deductions. Gross pay will include any overtime you may have earned during the pay period Net Pay Net pay is the amount of
money left over after all
deductions for FICA, Taxes
an insurance are subtracted
from your gross pay Federal Income Tax Everyone is required
to pay Federal Income Tax.
Taxes are used to fund
infrastructure such as roads
and bridges as well as public
parks and recreation. The Federal Tax rate
is based on income. The
higher your income the
higher your tax rate. If your annual or yearly income is
0 to $8,375 your tax rate is 10%
$8,376 to $34,000 your rate is 15%
$34,001to $82,400 your rate is 25%
$84,401to $171,850 your rate is 28%
The maximum tax rate is 35% for
people who make over $376,000 per year

NC Income Tax North Carolina also has
an income tax to pay for education and other state
programs. For NC, the tax rate is
approximately 7% of you make
less than $12,750 per year and
7.75% if you make more than
$2,750 per year. 401k A 401k is a retirement savings plan
financed by employee payments. Often
your employer will contribute to the
plan. This is called matching funds Contributions usually
range from 5% to 20% of
your gross pay. Other Deductions Other deductions can
include contributions to
charity, life insurance
or parking
Full transcript