Pay (Gross and Net)
Pay is what the company promised you for doing your job.
Gross Pay is the dollars arrived at by multiplying the agreed on rate times the hours or period of time performed. It may also include commissions, premium for overtime or holidays, bonus or profit sharing dollars.
Net Pay is the amount left and which you receive in the form of cash, paycheck or automatic deposit after subtracting from the Gross Pay deductions required by law such as income taxes (Federal, State and Local), Social Security Tax (FICA) and voluntary deductions such as savings bonds, credit unions, group insurance, union dues, etc.
Extra Activity:
Look at your paycheck, and break it down. How much of your Gross Pay do you keep, as a percentage? Where does that other money go?
You should know what your Gross Pay is. Figure out how much is taken out as tax, insurance, and other deductions. This is your Net Pay. Now divide that by the number of hours you worked in that pay period. How much is your hourly Net Pay?
