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# Feb 23 Calculating Net Pay

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### Feb 23 Calculating Net Pay

1. 1. Calculating Net pay we will need a copy of the Payroll Deduction Tables
2. 2. Demonstrate an understanding of calculations for gross pay and net pay earned through income sources including · Wages · Salary
3. 3. There are 2 steps to calculate net pay 1. Find taxable income 2. Find net pay
4. 4. Finding taxable income taxable income is what your taxes are based on, it is your income minus all allowable deductions. allowable deductions dental plan union dues child care RSPs tuition
5. 5. taxable income = gross pay - allowable deductions example Steve's gross pay is \$450 per week. He pays \$4 to his union, \$12 dollars for a dental plan. What is his taxable income? Solution 450 - 4 - 12 = \$434
6. 6. Finding net pay Net pay, or take-home pay, is the money you actually get to spend. It's your gross pay minus all deductions and taxes Deductions allowable deductions CPP EI Federal Tax Provincial Tax
7. 7. Net Pay = gross pay - allowable deductions - CPP - EI - Federal tax - Provincial tax
8. 8. How to find CPP, EI, Federal Tax and Provincial tax. Use taxable income and look in the Payroll Deduction Tables You need a claim code for the 2 taxes.
9. 9. Example Steve makes 450 per week and has \$16 dollars of allowable deductions. His claim code is 1. How much does he pay for: remember taxable income = 450 - 16 = 434 CPP: \$18.15 EI: \$7.51 Federal Tax: \$28.95 Provincial Tax: \$27.30
10. 10. 450 - 16 - 18.15 - 7.51 - 28.95 - 27.30 = \$352.09 His net pay is \$352.09
11. 11. Example 2 Betty makes \$2000 per month. She pays \$150 to her union and contributes \$100 to RSPs. What is her net pay if she falls in claim code 2?
12. 12. Solution taxable income = 2000 - 100 - 150 = 1750 CPP = 72.19 E.I. = 30.28 Fed IT = 94.80 Prov IT = 96.80 Net pay = 2000 - 250 - 72.19 - 30.28 - 94.80 - 96.80 = \$1455.93