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Chapter 03: Income

Overview

Time records, calculation of hours worked, and gross pay, including overtime pay, are introduced in this chapter. This is followed by differentiation between gross pay and net pay. Payroll deductions are made for FICA tax, as are withholdings for federal and state income tax. Other types of pay introduced include tips, commissions, and piecework. Graduated pay scales are included for the latter two. Buying and selling of bonds, including brokerage fees, and discussions of laddering and diversification are covered. Buying and selling of stock with brokerage fees and the profit realized over time is found.

What you can expect to learn

After this chapter you should be able to
1. determine from a time sheet the number of hours worked daily and weekly.
2. compute weekly gross pay for hourly wage employees.
3. determine payroll deductions for state and federal taxes, FICA, and insurance plans.
4. determine net pay.
5. calculate pay for employees on salary and those receiving tips.
6. calculate pay based on commissions or piecework.
7. calculate investment transactions in stocks and bonds.

Activity List