Deductions on a Pay Stub

CLB Level: 3
Essential Skills Focus:
Document use (pay stub)
Numeracy (calculate deductions and net pay)
Thinking skills (finding information, problem solving)
Working with others (partners)
Task: Become familiar with a Canadian pay stub
Purpose: Students will
  • understand deduction vocabulary associated with a pay stub
  • learn how net pay is calculated
Materials: Pay stub examples, teacher notes, teacher-made question sheets, calculators, gap fill exercises, blank pay stub
Learning Style: Auditory, visual, tactile
Time:2 -3 hours / Method
Activate student’s prior knowledge. Ask how many students have seen a pay stub. Ask if they can name any deductions or money that is taken off a pay cheque. Record the names of the deductions on the board for discussion. 2. Show overhead of a pay stub (see below). Discuss deductions (see teacher notes below). Students can work in pairs to answer questions about the pay cheque (see below).
Follow Up:
Provide students with the extra pay stubs to practice calculating net pay. (Gross pay – deductions = net pay).Students may use calculators if necessary. 2. Use the extra pay stubs and questions as review. 3. Students can practice pay cheque vocabulary with the gap fill exercises below.
Debrief/Transfer:
What essential skills did you cover in this activity? How do you think the information about understanding a pay stub will help you in the workplace?

WinnipegSchool Division Adult EAL ProgramEssential Skill Focus: Document Use / Numeracy

Author: Lisa ReichertCLB level: 3

Statement of Earnings Care to Care Inc.

150 Main Street

Winnipeg, Manitoba

R2V 0D2

(204) 989-1234

Lisa Smith / Employee # 62156 / Pay from
2009/03/23 / To
2009/04/06 / Date
2009/04/07
STATEMENT OF EARNINGS / EMPLOYEE DEDUCTIONS AND EMPLOYER CONTRIBUTIONS
TYPE / HOURS / RATE / AMOUNT / Y.T.D. / TYPE / CURRENT / Y.T.D.
001 Basic Pay / 40.00 / 11.00/hr / 440.00 / 2200.00 / E.I.
CPP
TAX / 7.92
15.20
68.20 / 39.60
76.00
341.00
SUMMARY / GROSS PAY / DEDUCTIONS / NET PAY / NET PAY ALLOCATION
CURRENT / 440.00 / 91.32 / 348.68 / 348.68 – Direct Deposit
YEAR-TO-DATE / 2200.00 / 456.60 / 1743.40

WinnipegSchool Division Adult EAL ProgramEssential Skill Focus: Document Use / Numeracy

Author: Lisa ReichertCLB level: 3

Pay Cheque Vocabulary Notes

Deductions – The amount of money taken off your pay cheque.

Employment Insurance (EI) – If you lose your job because of a lay off, then you can apply for EI. You are allowed EI if:

  1. You have paid into EI.
  2. You have been without work for 7 days in a row.
  3. You have worked the required number of hours.

This is about half of the monthly salary you received at your last job. EI is only enough money to help you get by while you search for another job. You will have to show proof you are looking for work. Sometimes EI will allow you to go back to school to receive extra training to help you get a job.

If you are sick and your illness stops you from working and you have worked 600 hours in the last 52 weeks, you may be able to collect EI for up to 15 weeks. You will need a doctor’s certificate to prove you are ill.

Canada Pension Plan (CPP)–About 5% of your salary is deducted for your CPP. Your employer will also pay 5%. This means when you are older you will have about 10% of your salary in savings for when you can’t work. When you are 65, you can start receiving payments. Right now it’s about $450 per month.

Income Tax – Everyone has to pay Federal and Provincial income tax. The more you earn, the more you pay. This money goes to run Canada and pay for things like healthcare, roads, and education. When you fill out your income tax forms in April you may get some money back.

Union Dues – If your company has a union you will have to pay union dues. In a union, workers join together to improve their wages, hours, working conditions and job security. If the union and the company cannot agree on a contract for workers, then the workers may strike and stop working. The union helps workers live during a strike by helping them with food and money. This is called strike pay.

Benefits – To get benefits, you must pay some money every pay cheque. If the company offers benefits, you cannot opt out of the plan unless you can show your spouse’s plan is better.

  • Short term disability – If you get sick or hurt outside of work, you may get paid some of your salary for about 4 months.
  • Long term disability – If you get a sickness or injury outside of work that keeps you from working for a long time, you might be able to get some of your salary for a longer time.
  • Life insurance – This is money for your family if you die while you are an employee of the company.
  • Medical – Medical benefits will pay for some or all of your prescription drugs, ambulance bills, chiropractor bills and physiotherapist bills. Every company pays a different amount. When you are hired, it is important to know how much you pay and how much the company pays.
  • Optical – Vision care may be covered by your plan. This may cover eye exams and eye glasses.
  • Dental – If you have dental coverage, you may only have to pay a small amount to go to the dentist. This is called your deductible. Usually cleanings, check-ups, and fillings are covered. Major work, like crowns, dentures or braces may not be covered. It is always important to check your plan.

Gross Pay – The amount of your cheque before deductions.

Net Pay – The amount of money that goes into your bank account.

Reading a Pay Stub

Work with a partner. Answer the questions. Use complete sentences.

1. Who is this pay stub for?

______

2. Where does the employee work?

______

3. What is Lisa’s employee number?

______

4. What was deducted from Lisa’s cheque? Name the deductions.

______

5. What were Lisa’s total deductions for this pay cheque?

______

______

6. How much total tax has Lisa paid in 2009?

______

7. How much money will go into Lisa’s bank account for this pay period? What is her net pay?

______

8. How much does Lisa make per hour?

______

9. When will Lisa’s net pay go into her bank account?

______

10. What does CPP mean?

______

Employee Pay Stub

EMPLOYER NAME / TELEPHONE
Furniture Fixer / (204) 957-1020
ADDRESS
98 Markum Drive
Winnipeg, Manitoba
R6W 2X7
EMPLOYEE NAME / SIN
Bob Smith Employee # 12678 / 645 911 768
ADDRESS
22-412 Cumberland Ave.
Winnipeg, Manitoba
R2R 3B7
PERIOD ENDING / PAY DATE
2009-01-30 / 2009-02-02
EARNINGS / RATE / HOURS / GROSS / YEAR TO DATE
Regular / $19.23 / 70 / 1346.10 / 1346.10
GROSS PAY 1346.10
DEDUCTIONS
Tax / 195.90 / 195.90
EI / 23.29 / 23.29
CPP / 59.97 / 59.97
Union dues / 13.46 / 13.46
Health / 12.30 / 12.30
TOTAL DEDUCTIONS
NET PAY

Reading a Pay Stub

Work with a partner. Answer the questions. Use complete sentences.

1. Who is this pay stub for?

______

2. Where does Bob work?

______

3. What is Bob’s employee number?

______

4. What was deducted from Bob’s cheque? Name the deductions.

______

5. What were Bob’s total deductions for this pay cheque?

______

______

6. How much total tax has Bob paid in 2009?

______

7. How much money will go into Bob’s bank account for this pay period? What is his net pay?

______

8. How much does Bob make per hour?

______

9. When will Bob’s net pay go into his bank account?

______

10. What does CPP mean?

______

Pay Cheque Vocabulary

Put the correct word on the line.

1. When your pay goes directly to your bank account, it is called______.

2. The paper that you get that shows your pay and deductions is called your______.

3. Money that you get when you are older and stop working is called your______.

4. Y.T.D means______.

5. The money that you are paid per hour is your______.

6. The money taken off your cheque is called ______.

7. The amount of your cheque before deductions is your

______.

8. Another word for wage is______.

deductions gross pay net pay

rate pay stub pension

year to date wage direct deposit

Pay Cheque Vocabulary

Put the correct word on the line.

1. The amount of money that you earn for each hour that you work is called your______.

2. The paper that you get that shows your pay and deductions is called your______.

3. Money that you get when you are older and stop working is called your______.

4. The amount of money that you take home is______.

5. The amount of time between pay cheques is called a ______.

6. The money taken off your cheque is called ______.

7. The amount of your cheque before deductions is ______.

8. The amount of money you earn every month or year is your ______.

deductions gross pay net pay

pay period pay stub pension

salary wage direct deposit

Employee Pay Stub

EMPLOYER NAME / TELEPHONE
ADDRESS
EMPLOYEE NAME / SIN
ADDRESS
PERIOD ENDING / PAY DATE
EARNINGS / RATE / HOURS / CURRENT / YEAR TO DATE
Regular
GROSS PAY
DEDUCTIONS
Federal Tax
Provincial Tax
EI
CPP
Other:
TOTAL DEDUCTIONS
NET PAY

WinnipegSchool Division Adult EAL ProgramEssential Skill Focus: Document Use / Numeracy

Author: Lisa ReichertCLB level: 3