•Most important form you’ll fill out at work.

•Affects how much money you take home in each paycheck.

•Understand it and fill it out correctly.

First Day of WorkWhat’s a Form W-4?

What are all these deductions from my paycheck?

The total amount of money earned before any deductions are made.

The amount left after all deductions are taken out of the gross pay.

PAYDAY

GROSS PAY

NET PAY

Deduction What do you get? Who pays?

Federal income tax Funds services provided by the federal Employee government, such as defense, human services, and the monitoring and regulation of trade.

Employee

State income tax Funds services provided by state government, such as roads, safety, and health. (Not all states have an income tax.)

Employee

Local income tax Funds services provided by the city or other local government, such as schools, police, and fire protection. (Not all areas have an income tax.)

Employee

FICA: Social Security tax (also known as OASDI)

Provides for old-age, survivors, and disability insurance benefits.

Employee and employer

FICA: Medicare tax (also known as HI)

Provides health insurance for retirees and certain disabled persons.

Employee and employer

REQUIRED DEDUCTIONS

Deduction What do you get? Who pays?Life insurance Pays a beneficiary in the event that an

employee dies.Employer or employee, or shared

Short- and long-term disability insurance

Provides benefits in the event that an employee is disabled.

Employer or employee, or shared

Medical insurance Employee and family insurance coverage for medical careexpenses, including hospitalization, physician services,surgery and major medical expenses.

Employer or employee, or shared

Dental insurance Employee and family insurance coverage for dental careexpenses, including preventive, diagnostic, basic, major andorthodontic services.

Employer or employee, or shared

OTHER DEDUCTIONS

Retirement savings plan

Normally, a tax-deferred savings plan for retirement.

Employer or employee (Employer may match)

Charity A donation to a specific charity. Employee (Employer may match a percentage of employee’s contribution)

Deduction What do you get? Who pays?

OTHER DEDUCTIONSContinued

Example:

You are single with one job

Filling Out Form W-4

Do you need help with your W-4?If so, visit www.NationalPayrollWeek.com/FormW4

The total amount of money earned before deductions are made.

1. What is gross pay?

2. What is net pay?

3. True or False?

The amount you earn after all deductions are made from gross pay.

False, deductions must still be made.

Your paycheck= Total hours worked x rate of pay?

Questions

4. Name 2 mandatory deductions.

5. Name 3 other deductions.

Continued

•Life insurance •Disability insurance •Medical insurance

•Dental insurance•Retirement savings plan•Contributions to charity

•Federal income tax•State income tax•Local income tax

•Social Security tax•Medicare tax

Questions

Imagine you are a new employee at Foo Foo Gourmet Coffee Shop.

•Employees at Foo Foo are paid weekly.

•You’ve claimed single and one allowance on your Form W-4.

•You’ve worked 40 hours this week at $9/hour.

Calculating Paycheck #1

Calculating Paycheck #1

Imagine you are a new assistant manager at Foo Foo Gourmet Coffee Shop.

•Employees at Foo Foo are paid weekly.

•You’ve claimed single and zero allowances on your Form W-4.

•You’ve worked 40 hours this week at $9.50/hour.

Calculating Paycheck #2

Calculating Paycheck #2

1.Use Direct Deposit

2. Don’t have a bank account? Ask your company to pay you with a Paycard.

3.Use Prepaid Reloadable Cards.

Getting PaidGo Green With Your Green

Prepaid reloadable card

1. Bobby works for Foo Foo Gourmet Coffee Shop. The shop only pays employees by direct deposit, but Bobby doesn’t have a bank account. How should he ask to be paid?

2. Should Bobby ask to be paid differently if he opens a bank account while working for the coffee shop?

Yes, he should ask to be paid by direct deposit.

Questions

Direct deposit

3. Valerie just opened a bank account and startedworking for a local restaurant that offers paycards and direct deposit. How should she ask to be paid?

4. Emily doesn’t have a bank account, but her boss says she can only be paid by paycard or direct deposit. How should she ask to be paid?

Paycard

QuestionsContinued

•The federal minimum wage is $7.25 per hour.

•19 states have a higher minimum wage.

•Get paid the higher amount.

Minimum Wage

What state do you live in?

Minimum WageContinued