CCFE Unit 4 - Getting Paid

4 ways employees are paid by employer

salary, hourly, commission, peace work

what are three methods of payment (depository)

paper paycheck, direct deposit, payroll card

one pro and con for payroll card

+: reloadable debit card makes transactions easy

-: many fees

one pro and con for paper paycheck

+: easy to deposit/cash

-: easily lost/delayed or stolen

one pro and con for direct deposit 

+: convenient, deposits directly into your account

-: requires a bank account (that is stable)

what is “principle”

how much $ borrowed

what are 3 downsides of cash payment?

easier to lose or be stolen, harder to pay taxes, doesn’t allow you to pay social security and gain benefits (no workers comp)

what is income tax

tax you pay to federal, state, and local govs on the amount of money you earn

what are payroll taxes

withheld or paid on your behalf by your employer. Based on wage or salary 

what is federal income tax

tax levied by IRS on annual earnings of individuals, corps, etc. Employers are required to withhold a % of your wages to pay this

what is W-4

determines amount of pay withheld from paycheck to pay federal income tax liability

what is I-9

employer must have this, employee’s federally legal ID

what is state income tax

income tax collected by most states (instead of sales tax)

what is social security

employers withhold this tax from your income to con fund retirement accounts, support disabled people, premature deaths in families, etc. 6.2% goes to this

what is medicare

employers withhold from income to contribute to medicare. Helps pay healthcare for people over 65. 1.45% goes to this

what is a pay stub

information regarding deductions, provided by employer and is available at end of each pay period

what is workers compensation

when injured at work while working, the company pays for medical expenses (insurance fees)