Why Your Paycheck Is Smaller Than You Expected

Estimated time: one 40–50 minute class period. With a 45-minute period, set the quiz as homework — steps 1–7 run in 34–42 minutes depending on how long the pair work takes, and the quiz is the only part that detaches cleanly. If step 5 runs to its full twelve minutes, take the wrap-up down to three by reading out one sheet instead of three.

Lesson sequence

1. Warm-up (3–4 min). Write on the board: $15.00 an hour, 20 hours. Ask every student to write down the number they would expect to see in their account on payday, and to keep it. Nobody has been told anything yet, so almost every sheet will say $300.00. Those sheets come back in step 7.
2. Watch the video (2 min). Play it straight through, once, with no introduction. It runs 1 minute 34 seconds. Ask for one thing they heard that they had not expected.
3. The two words (5–6 min). Put gross pay and net pay on the board and get the class to define each in their own words before you give them the ones on this page. Then list what the video says comes out: Social Security at 6.2%, Medicare at 1.45%, federal income tax, and state income tax where the state charges it. Two of those four are set rates. Two of them are not, and that is where the lesson goes.
4. Watch it again (3–4 min). Play it a second time, and this time ask the class to listen for the two reasons the video gives for two workers on the same wage being paid differently. They are easy to miss the first time: the W-4, and the state. Texas and California are the video’s own example.
5. Two stubs, one wage. In pairs (10–12 min). Hand out page 3 — and hand out pages 3 and 4 before pages 1 and 2, not the whole packet at once. Both stubs show $300.00 gross for the same job. Students work out the Social Security and Medicare lines themselves, notice that those two match, total each stub, find each net, and then split the difference between the two workers across the two causes. The moment to stop and point at is which half of that gap is larger; most classes assume it is the federal line and it is not.
6. What can you actually buy? (7–8 min). Page 4 gives the inputs and prints no answers. The same purchase is set against the same wage, and it comes out affordable for one of the two workers and not for the other. Let students do the version against gross pay first, because getting the comfortable answer and then losing it is the whole point of the page.
7. Wrap-up (4–6 min). Hand back the warm-up sheets from step 1. Each student writes one sentence under their own number saying what it actually was and what they would now check before spending it. Read two or three out.
8. Quiz (6–8 min). Students take the separate 12-question quiz on pages 1–2, one point per question. Every item is answerable from the video alone, so it works as homework if the period runs out. The answer key is page 5, for the teacher, and detaches first.

Activities

• Split the gap. The core of page 3. Two stubs, one wage, one difference, two causes — how many dollars of the gap belong to the W-4 and how many to the state? Students who finish early can be asked the harder version: which of the two causes could each worker do something about, and what would doing something about it actually mean?
• Set rate or not? Read the four deductions out one at a time — Social Security, Medicare, federal income tax, state income tax — and have students hold up two fingers if the line would be identical on two stubs showing the same gross pay and one finger if it might not be. Then ask them to say why for each. This takes three minutes and it is the fact the rest of the lesson rests on.
• The register test. Using the bottom of page 4, each student picks something they might buy and a wage they might earn — a real one or an invented one, and the page says in as many words that they are never asked to hand their own figures in. They work out what they would have thought they had, then what a stub would have told them. The only thing being marked is whether the second number was found before the purchase rather than after it.

Assessment

Students complete the separate 12-question multiple choice quiz, worth one point each, so it is out of 12. Six of the seven objectives are assessed by at least one quiz item: what gross pay is and which number reaches the bank, the two payroll taxes and their rates, why those two lines match on two stubs showing the same gross, the two reasons the same wage produces different paychecks, what a W-4 is, what a pay stub shows, and what goes wrong when a purchase is planned against a wage. The seventh — working out both workers’ net pay and splitting the gap across the two causes — is assessed on page 3, not by the quiz, because it is a computation and not a recognition task. If you are grading from the quiz alone, that objective has no evidence in it; collect page 3. The teacher answer key is the last page of the printable PDF and can be detached before distribution.

Extension

• Find your own state. Students look up whether their own state charges a personal income tax, and, if it does, find one neighboring state that does not. Ask what else they would want to know before calling one of them the better place to work. There is no figure to look up here and none is wanted — the question is what the answer would change.
• The stub in the room. Any student with a job brings in a stub with the personal details covered over, and the class finds gross pay, the deductions and net pay on it. Real stubs carry lines this lesson does not use, which is a useful thing to see: the two-line part they can predict, and the rest they cannot.
• Write the listing. A job listing says “$15.00 an hour”. Students write one extra sentence the listing could honestly add so that nobody reading it works out the wrong number. Then argue about whether an employer would ever print it.