Name17.1

?

Personal Financial

Literacy—5.10.A

Also 5.3.K

MATHEMATICAL PROCESSES

5.1.A, 5.1.B

Income and Payroll Taxes

Essential Question

What are income tax and payroll tax?

Unlock

Unlock the

the Problem

Problem

A tax is money paid to the government in exchange for services, such as

road maintenance and police protection.

Income tax is based on the amount of money you earn, or your income.

Federal income tax is paid to the United States government. Some states and

cities also have an income tax. Workers throughout the United States pay

federal income tax, but state or city income taxes vary across the country.

Workers also pay other taxes for government support programs, such as

medical care.

Sometimes, these taxes are paid directly to the government. Other times, an

employer will withhold these taxes from an employee’s earnings and pay the

government. The total tax an employer withholds is called payroll tax. The

amount in an employee’s paycheck shows the pay after taxes.

1001

Calculate pay after taxes.

Mia earns $600 per week. When she gets

her paycheck, it includes a pay stub that

shows total earnings and payroll tax. Find

Mia’s pay after taxes.

Circle the taxes taken out of Mia’s paycheck.

Add the taxes to calculate the payroll tax.

Employee:

Mia Goodwin

Total earnings

$600.00

Federal income tax

$75.45

State income tax

$15.17

Other taxes

$37.20

Pay period:

July 1–July 7

Total taxes

Pay after taxes

Detach and retain for your records.

$__ + $__ + $__ = $__

Subtract the payroll tax from her total earnings.

Math Talk

Mathematical Processes

© Houghton Mifflin Harcourt Publishing Company

$600 − $__ = $__

So, Mia’s pay after taxes is $__.

Evaluate Reasonableness How

can you check that the amount

you found for Mia’s pay after

taxes is correct?

Module 17

617

Example

Rob earns $500 per week. He has payroll tax taken

out of his earnings. Unfortunately, Rob spilled

kale juice on his pay stub, covering up some of

the values. He knows the Other taxes are $10. How

much state income tax was withheld from Rob’s

earnings?

1011

Employee:

Rob Alexander

Pay period:

d::

May 1-7

Total earnings

$500.00

Federal income tax

7.6

$77.66

State income tax

$00 00

$00.00

Other taxes

$

$00.00

0

ta taxes

Total

Pay after taxes $390.33

Detach and retain for your records.

Find the payroll tax withheld from Rob’s

total earnings.

$__ − $__ = $__.

Add the federal income tax and other taxes.

$__ + $__ = $__.

Subtract the total of federal income tax and other taxes

from the payroll tax to find the state income tax.

$ __ − $__ or $__.

So, Rob’s state income tax is $ __

Share

Share and

and Show

Show

Rita works in a state with no state income tax.

Use Rita’s pay stub for 1–2.

2001

Employee:

Rita Logan

1. Calculate Rita’s payroll tax.

Total earnings

Federal income tax $120.66

Other taxes

$__ + $__

Pay period:

September

= $__

2. Calculate Rita’s pay after taxes.

$700.00

$15.55

Total taxes

Pay after taxes

Detach and retain for your records.

$__ − $__ = $__

3.

618

Write Math

Explain how you can calculate payroll tax if you

know total earnings and pay after taxes.

© Houghton Mifflin Harcourt Publishing Company

Problem

Problem Solving

Solving

Name

Problem

Problem Solving

Solving

4. Leticia pays federal income tax of $18 for every $100 she earns. How

much will she pay as federal income tax if she earns $500? Explain.

5. Michelle works for 33 hours this week. She earns $10 per hour. Her pay

after taxes is $277.11. How much does she pay in payroll tax?

6.

Multi-Step Oliver lives in a state with no state

income tax. He pays $150 in payroll tax each week. If the federal

income tax is 0.75 of the payroll tax, how much are the other taxes?

7.

Multi-Step The pay stub

shows the payroll tax withheld from Maeve’s

paycheck. If Maeve gets paid twice a month,

how much does she pay in payroll tax in one

month? Explain.

1351

Employee:

Maeve Kelley

Pay period:

January 1–15

Total earnings

$570.00

Federal income tax $112.66

State income tax

$18.50

Other taxes

$17.35

Total taxes

Pay after taxes

© Houghton Mifflin Harcourt Publishing Company

Detach and retain for your records.

Module 17 • Lesson 1

619

Mathematical Processes

M

Model ¥ Reason ¥ Communicate

M

Daily

Daily Assessment

Assessment Task

Task

Fill in the bubble completely to show your answer.

8. Arman works in a state with no state income tax. He earns $625 each week.

He pays $38.45 in other taxes. His pay after taxes is $499.61. How much

federal income tax does he pay?

A

$38.45

B

$76.90

C

$86.94

D

$88.72

9. Communicate Miranda earns $450.75 at her part-time job. She pays $98.12

in federal income tax and $12.00 in other taxes. How can you determine

Miranda’s pay after taxes?

A

Subtract the sum of the taxes from the total earnings.

B

Subtract the amount earned from the sum of the taxes.

C

Add all the taxes.

D

Subtract only the federal income tax from the total earnings.

10. Multi-Step Joe has two part-time jobs. At his first job, he earned $200 and

paid $42 in payroll tax. At his second job he earned $175 and paid $24 in

payroll tax. What is his pay after taxes?

A

$158

C

$351

B

$309

D

$303

TEXAS Test Prep

11. Mark’s pay after taxes is $855.08. If his total earnings are $1,100, how

620

A

$1,100

B

$144.02

C

$244.92

D

$855.08

© Houghton Mifflin Harcourt Publishing Company

much does Mark pay in payroll tax?

H o mewo rk

and Practice

17.1

Personal Financial Literacy—5.10.A

Also 5.3.K

MATHEMATICAL PROCESSES 5.1.A, 5.1.B

Name

Income and Payroll Taxes

1. Write an equation to show how to calculate the

total amount Sam pays in payroll tax.

6405

Employee:

Sam Brown

2. Use your solution in Exercise 1 to write an

equation to calculate Sam’s pay after taxes if

his total earnings are $800.

Total earnings

$800.00

Federal income tax $112.50

State income tax

$24.25

Other taxes

$12.90

Pay period:

January

Total taxes

Pay after taxes

Detach and retain for your records.

3. Explain how you can calculate total earnings if you know the

payroll tax and the pay after taxes.

Problem

Problem Solving

Solving

4. The pay stub at right shows Darla’s earnings and

taxes this week. Darla says her pay after taxes will

be an amount greater than $600. Explain how you

can use estimation to decide if Darla is correct.

4675

Employee:

Darla Moore

Total earnings

$750.00

Federal income tax $119.45

State income tax

$30.15

Other taxes

$11.21

Pay period:

March 14–21

Total taxes

Pay after taxes

© Houghton Mifflin Harcourt Publishing Company

Detach and retain for your records.

5. Adolfo earned $650 last week. He paid $97.50 in federal income tax.

He paid one third that amount for state income tax and other taxes combined.

What was Adolfo’s pay after taxes? Explain how you found your answer.

Module 17 • Lesson 1

621

TEXAS Test Prep

Lesson

Lesson Check

Check

Fill in the bubble completely to show your answer.

in federal income tax. The other taxes are

$17.00. Her pay after taxes is $547.40. How

much does Lacey pay in state income tax?

A

$3,160

A

$74.80

B

$3,081

B

$38.60

C

$3,761

C

$115.60

D

$2,981

D

$23.80

8. Which statement about total earnings and

pay after taxes is correct, if the payroll tax is

withheld?

A

Pay after taxes is greater than total

earnings.

9. Each week, Kelly pays $68.45 in federal income

tax, $22.81 in state income tax, and $18.75 in

other taxes. Which is the best estimate for the

payroll tax Kelly pays each month?

A

$440

B

Pay after taxes is less than total earnings.

B

$110

C

Total earnings and pay after taxes are

the same.

C

$280

D

$360

D

Total earnings are less than the pay after

taxes.

10. Multi-Step Each week, Desiree earns $925

and pays $148 in payroll tax. How long does it

take Desiree to earn at least $3,000 after taxes?

622

7. Lacey earns $680 each week. She pays $91.80

she pays $680 in federal income tax, $160 in

state income tax, and $79 in other taxes. What

is Martina’s pay after taxes each month?

A

4 weeks

B

3 weeks

C

5 weeks

D

7 weeks

11. Multi-Step Brian works 24 hours this week.

His earns $9.25 per hour. He pays $37.30 in

payroll tax. He deposits half of his pay after

taxes in his savings account. He deposits the

other half of his pay after taxes in his checking

account. How much money is deposited into

each account?

A

$184.70

B

$129.65

C

$92.35

D

$46.55

© Houghton Mifflin Harcourt Publishing Company

6. Martina earns $4,000 per month. Each month,

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