Understanding Net Pay
This worksheet helps grade 9 students understand how net pay is calculated, including deductions like taxes and insurance.
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Understanding Net Pay
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Read each question carefully and answer to the best of your ability. Show all your work for calculation questions.
1. is the total amount of money an employee earns before any deductions.
2. The amount of money an employee takes home after all deductions is called .
3. Mandatory subtractions from gross pay, such as taxes, are known as .
4. Social Security and Medicare taxes are examples of deductions.
1. If your gross pay is $800 and your total deductions are $150, what is your net pay?
$650
$800
$950
$150
2. Which of the following is typically NOT a mandatory deduction from gross pay?
Federal Income Tax
State Income Tax
Health Insurance Premiums
Charitable Donations
1. Sarah earns $12.50 per hour and works 40 hours a week. Her federal income tax is $75, state income tax is $25, and Social Security/Medicare (FICA) is $35. Calculate her gross pay and net pay for the week.
Gross Pay:
Net Pay:
2. David's annual salary is $45,000. Each month, $300 is deducted for health insurance, $150 for retirement, and his total monthly taxes are $500. What is his monthly gross pay and monthly net pay?
Monthly Gross Pay:
Monthly Net Pay:
1. Gross pay is always less than net pay.
True
False
2. Health insurance premiums are an example of an optional deduction.
True
False
1. Why is it important for individuals to understand the difference between gross pay and net pay?