2.  Personal choices about investment in
oneself as human capital through
education, training, and skill
development impact earnings.

3.  Knowledge and skills a person possesses

4.  People invest in their own human capital
when they gain knowledge and skills
through education, training, and
experience

5.  People with more education and skills
tend to earn higher incomes than
uneducated and unskilled workers.

6.  People can receive income from a
variety of sources

7. Earned: Unearned:
 Salary  Interest
 Hourly wages  Return on investment
 Overtime  Inheritance
 Tips  gifts
 Commissions
 Bonuses
 Piece rate

8.  Net pay is what remains after voluntary
and required deductions are subtracted
from gross pay

9.  Total money earned before deductions
 Some deductions are required
 Some may be voluntary

10. Net pay results when deductions such as the
following are subtracted from gross pay:
 Federal Insurance Contributions Act (FICA)
contributions
 State and Federal Taxes
 Insurance
 Savings
 Retirement
 Medical reimbursement (pre-tax deduction)
 Child care reimbursement

11.  Employees may have a variety of
benefits and incentives to consider

12.  Benefits are part of an employee’s compensation,
over and above wages or salary. They add to the
financial value of the job
 Examples of benefits:
› Matching contributions to tax-sheltered annuities, such as
401(k) and 403(b) retirment savings plans
› Savings plans
› Parking
› Health insurance plans (medical, dental)
› Child care
› Elder care
› Paid vacation
› Paid sick days
› Profit sharing

13.  Incentives are offered as motivation for
employees to perform well and may
include:
› Bonuses
› Profit sharing
› Free travel or merchandise

14.  The information a worker provides on the
W-4 form impacts federal tax deductions
and personal income

15.  The information provided on the W-4
form determines how much is withheld
from one’s gross pay.