Pay stub decoder: a 7th grade lesson on gross and net pay

1. Ask: "If you work 20 hours at $12 an hour, how much do you take home?" Most students will say $240.
2. Find gross pay: 20 times $12.00 is $240.00.
3. Social Security is 6.2 percent of $240, which is $14.88. Medicare is 1.45 percent of $240, which is $3.48.
4. Subtract all three: $240.00 minus $14.88 minus $3.48 minus $9.00 is $212.64 net pay.
5. Explain Form W-4: the form a worker fills out at a new job so the employer can work out how much federal income tax to take out of each paycheck.
6. Groups decode the second stub on their own: 15 hours at $10.50, with $5.00 federal income tax withheld. (Gross $157.50, Social Security $9.77, Medicare $2.28, net $140.45.)
7. Discuss what the taxes pay for: Social Security benefits and Medicare health coverage, mostly for older adults.

Differentiation: students who need support get the percents written as decimals (0.062 and 0.0145). Students who are ready add a state income tax line of 3 percent. English learners can use the words gross, net and withhold.

Quick check: ask: what is the difference between gross pay and net pay?

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