Kristie Matthews, Mickie Phillips, Jake Sharp, Tomi Thompson

  Consumer Education, Employability, Life Skills, Mathematics

Learner Level:
  Intermediate to Advanced

Time Frame:
  Several class sessions

Learning Grouping:
  Small group, whole class

  The activity took place in Adult and Families First Education class in a classroom setting. Classes were held Monday through Friday from 8:00 am to 12:00 pm. There were 10 students that participated.

  Not available

  Scott County Adult Education/Families First

Type of Program:

Student Population Served:
  Basic skills (grade levels 5-8.9)

My paycheck amount - Computing taxes and withholdings

The focus of this activity was for learners to actively participate to calculate income tax and other deductions that are figured as a percentage of gross earnings. As a group activity, learners became familiar with the difference between gross earnings and net earnings by calculating and subtracting different types of deductions. In addition, learners gained information about different types of benefits that can be offered. __________________________________________________________

Learning Objective:
Learners will gain an understanding of take home pay by strengthening their understanding of various payroll deductions Learners will compute income tax, other standard deductions, and arrive at net earnings.

Primary Skill:
Use math to solve problems and communicate

Secondary Skills:
Lifelong learning

Learner Needs & Goals:
Many learners in class have little or no work experience. It was observed through class discussion and a work survey that learners were somewhat familiar with deductions. However, when asked if they knew the income tax rate or if they could compute their take home pay, most voiced that they could not perform this activity.

Learning Activity Description:

  1. Before the lesson begins, the instructor should use the index cards to create different scenarios. On one set of index cards, an hourly wage and hours worked, and a pay period (weekly or biweekly) should be listed. Various examples should be created. Do not compute gross earnings. Allow the learners to do this.

  2. The other set of index cards should contain a list of deductions for each pay period. The number of allowable withholdings, single or married, social security and Medicare rate, and other deductions such as health and life insurance premiums, etc. should be listed. Again, create different scenarios to allow learners to practice and perfect this skill.

  3. Separate the two groups of index cards and place in boxes or other types of containers so students can draw out different scenarios.

  4. As a group activity, allow students to draw out their first two cards and illustrate the principles of calculating gross earnings.

  5. Hand out copies of the Circular E Publication charts found in the Alternative Methods of Figuring Withholding section. These charts illustrate how to find federal income tax deductions based on pay period, single or married status, and number of withholdings.

  6. At this point, show learners how to figure other standard deductions such as Social Security and Medicare.

  7. The last step will be to subtract all deductions to arrive at a net pay.

  8. The following process can be repeated as often as needed for learners to gain this skill.

As a final activity, the instructor can allow learners to contact businesses, industries, or other sources for salary ranges. Learners can then calculate gross and net earnings and gather a general idea of possible salaries they could make at certain jobs (minus other deductions such as health insurance, etc).

Materials and Resources:

  1. Index cards
  2. Two different boxes or containers
  3. Employer's Supplemental Tax Guide: Supplement to Circular E, Employer's Tax Guide (Publication 15) for income tax withholdings (can download this from The Social Security and Medicare percentages are found in this publication. The only part that needs to be printed is the section titled: Alternative Methods of Figuring Withholding.

After completing this activity, learners will know where to locate standard deductions percentages, be able to calculate standard deductions amounts, and understand the difference between gross and net earnings. In addition, learners will be able to compare hourly wages more effectively.

The next time this activity is performed, we would like to incorporate a list of terms before hand for better understanding. Another activity that will be incorporated will be allowing students to download the IRS publication themselves.


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