Paycheck Decoder Worksheet
Paycheck Decoder
Financial Literacy: Annual, Hourly & Net Take-Home Pay
Name:
Date:
Period:
Cheat Sheet:
Work Year: 2,080 hrs (40 hrs × 52 wks)
Hourly Rate: Annual ÷ 2,080
Monthly: Annual ÷ 12
Net Pay: Gross − Deductions
1
Annual to Hourly & Periodic Earnings
Full-time standard (40 hrs/wk, 52 wks/yr)
| Career Title | Annual Salary | Monthly (÷ 12) | Bi-Weekly (÷ 26) | Hourly (÷ 2,080) |
|---|
| Graphic Designer | $52,000 | | | |
| | | | |
|
|
| Registered Nurse | $83,200 |
|
|
|
| Apprentice Electrician |
|
|
| $25.00 / hr |
2
Paycheck Anatomy: Gross vs. Net Take-Home Pay
Marcus's Monthly Paystub STUB #108
Gross Monthly Pay: $5,000.00
($60,000 Annual Salary ÷ 12)
Itemized Deductions:
Federal Income Tax (12%): $600.00
State Income Tax (5%): $250.00
FICA (Soc. Sec. & Med.): $382.50
Health & Dental Insurance: $217.50
401(k) Retirement (5%): $250.00
Total Deductions:
A. Calculate Total Deductions Sum of all 5 deductions
Total: $
B. Calculate Monthly Net Pay Gross ($5,000) − Deductions
Net Pay: $
C. Actual Take-Home Percentage (Net Pay ÷ Gross Pay) × 100
Percent Kept:
%
3
Career Decision: Comparing Total Compensation
Jordan receives two entry-level job offers. Review each company's gross monthly pay and required monthly expenses:
Offer A: Urban Tech $60,000/yr ($5,000/mo)
Required Employee Deductions & Costs:
• Health Insurance: $250/mo  | • Parking Pass: $150/mo
Offer B: Green Valley Labs $55,200/yr ($4,600/mo)
Company-Covered Benefits:
• 100% Free Health Plan ($0)  | • Free Metro Transit ($0)
Question 1: Subtracting insurance and commuting costs ($400 total), what is Offer A's adjusted monthly amount?
Offer A Adjusted: $5,000 − $400 =
(Compare directly with Offer B's $4,600)
Question 2: Which offer should Jordan choose? Justify your decision using the math above and at least one lifestyle/career factor:
Personal Finance Math: Payroll Deductions & Compensation Analysis Calculations rounded to nearest cent ($0.01)
Paycheck Decoder Answer Key
Paycheck Decoder
Teacher Answer Key
Instructional Guide, Solutions & Grading Rubric
Total Score: 100 Points
Standard: High School Financial Literacy
Teacher Note:
Benchmark: 2,080 hrs (Standard full-time calculation)
Common Misconception: Month ≠4 weeks (Year has 52 wks, not 48)
Bi-Weekly: 26 pays/yr (not 24)
1
Annual to Hourly & Periodic Earnings Solutions
30 Pts (10 pts per row)
| Career Title | Annual Salary | Monthly (÷ 12) | Bi-Weekly (÷ 26) | Hourly (÷ 2,080) |
|---|
| Graphic Designer | $52,000 | $4,333.33 | $2,000.00 | $25.00 / hr |
| Registered Nurse | $83,200 | $6,933.33 | $3,200.00 | $40.00 / hr |
| Apprentice Electrician | $52,000.00 | $4,333.33 | $2,000.00 | $25.00 / hr |
*Row 3 reverse formula: Hourly × 2,080 = Annual ($25 × 2,080 = $52,000). Bi-Weekly = $25 × 80 hrs = $2,000.
2
Paycheck Anatomy Solutions & Step-by-Step Work
35 Pts
Marcus's Monthly Stub SOLVED
Gross Monthly Pay: $5,000.00
Fed Tax (12%): $600.00
State Tax (5%): $250.00
FICA (7.65%): $382.50
Health & Dental: $217.50
401(k) (5%): $250.00
Total Deductions: $1,700.00
A. Total Monthly Deductions (10 Pts) Answer: $1,700.00
Work: $600 + $250 + $382.50 + $217.50 + $250 = $1,700.00
B. Monthly Net Pay (10 Pts) Answer: $3,300.00
Work: Gross ($5,000.00) − Deductions ($1,700.00) = $3,300.00
C. Take-Home Percentage (15 Pts) Answer: 66% (or 66.0%)
Work: ($3,300 ÷ $5,000) × 100 = 66.0% (Deductions = 34.0%)
3
Career Decision Solutions & Evaluation Rubric
35 Pts
Question 1: Adjusted Monthly Amount (15 Pts) $4,600.00 / month
Key Insight for Students: $5,000.00 − ($250 health + $150 parking) = $4,600.00. Notice this is the exact same baseline take-home amount as Offer B's gross ($4,600.00)! Despite a $4,800 higher gross salary ($60k vs $55.2k), the out-of-pocket fringe costs eliminate the cash difference.
