Income is the money people earn for their work or from other sources, such as businesses, gifts, or investments.
Your income is the total amount of money you make before any taxes or deductions are taken out.
Payroll taxes are amounts of money taken out of your paycheck by your employer to pay for government programs such as Social Security and Medicare.
Payroll taxes help pay for services people use when they are older or when they need medical care.
Income taxes are amounts of money individuals and businesses pay to the government based on how much money they earn.
Income taxes help fund public services such as schools, roads, parks, and libraries that benefit the whole community.
Gross pay is the total amount of money earned before any taxes or deductions. Net pay is the amount you actually take home after all deductions.
Gross pay is what you earn, and net pay is what you keep. It’s important to understand both when managing money.
We can use multi-step word problems to understand how income and payroll taxes affect what a person actually earns.
Use addition, subtraction, and multiplication to solve real-world problems involving income and taxes. Always show your work step by step.
Learning about income and taxes helps you plan for your financial future and understand how money supports your community.
Understanding income and payroll taxes builds good financial habits that help you make smart money decisions later in life.