>> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

>> This can't be.

This doesn't make any sense.

No, I multiplied it in my head, and it just... this does not come... no.

What?

I...

I... how can this possibly be?

>> What's that, Amanda?

>> I just got my first paycheck, and it doesn't make any sense.

>> You're probably confused about how much money you're actually getting.

That's what happened to me the first time.

>> Yeah.

I multiplied the hours I worked by my hourly wage, and it doesn't come out right.

Oh, Alex, while you're up, could you hand this to Miriam?

Thanks.

>> Thank you.

Oh, no, you see, you take the number of hours that you work and you multiply that by your hourly rate, and then you get what's called your gross pay.

I know, it's a weird word, but that's actually what it's called-- your gross pay.

See, it's right here.

>> Oh, let me see.

Oh, that's what I was expecting to get.

>> Exactly.

But see, then there are all these taxes and deductions.

>> Oh, show me.

>> Hey, Alex, do you think you could?

>> See, and once those are taken out of your gross pay, you're left with what's called your... that's it, your, your net pay.

It's this number right here.

Can you?

Thank you.

>> Net pay.

>> That's my take home pay!

>> Exactly.

That's yours to do with what you will.

>> What about all these other numbers?

>> What other numbers?

>> Alex, could you just... ( grunting ) >> Oh, no.

We're just about to explain this.

So... >> This is gross.

>> No, that's gross, that's net.

>> She needs a gross dose of Biz Kids.

>> ♪ When making money is the aim ♪ These kids they bring their game ♪ They're the Biz Kids can you dig it ♪ They know what's up and let you know ♪ Just how to make that dough ♪ They're the Biz Kids right on ♪ So learn a little more about bringing money through the door ♪ They're the Biz Kids right on.

♪ >> Outrage, outrage.

>> This is an outrage.

It's a travesty, an injustice, I say.

How could they do this to an honest worker?

>> Austin, Austin, what are you shouting about?

>> I've been working at New Ice Cream Place, eight dollars an hour, 15 hours a week for two weeks.

I should have $240 by now, but someone named Iris took $50 of my money and someone else named Soc Sec took another $20.

What kind of a name is Soc Sec anyway?

This is lame!

>> Can I see the check?

>> Yeah.

>> Okay, Iris and S... is this your first paycheck?

>> Yes, and it stinks.

>> Okay, well everybody knows that that Iris is actually... >> I-R-S. >> And Soc Sec is short for... >> Social Security.

>> There you go.

>> Who are they?

>> Well the IRS stands for Internal Revenue Service, and they take money from almost every citizen through taxes.

And that helps pay for roads and schools... >> But what if I don't want to pay for those?

>> You're going to drive someday, right?

>> Yeah.

>> And they also pay for the military, and if you don't pay, they'll come looking for you.

>> Ah.

Okay, so what about Soc Sec?

>> No, remember that's Social Security.

And everybody pays into that as well.

And when you retire, you can use that money to supplement your savings.

>> No kidding?

>> Mm-hmm.

>> Retire, you say.

Well, I hadn't really thought about retirement.

I am getting up there.

But, yeah, I could get used to that.

You know, a couple more months in the grind and hello retirement city.

>> I'm, I'm not sure it works quite like that.

I think it takes more that a couple months.

>> Hello retirement city.

Hello, retirement city.

Oh, yeah.

Hi, retirement city.

>> Hi!

>> Hi Iris, hi Soc Sec.

>> Yo, Iris!

Yo, Iris!

>> Iris and Soc Sec!

>> Welcome to What's With Your Wages?

where we check out your paycheck.

This installment, the W-4 Form.

>> Everybody that works gets paid.

And everyone that gets paid pays a percentage of their check to the United States government as taxes.

Now, the amount of your check you pay as taxes has to do with the W-4 form you filled out when you started work.

>> This tells the government the correct amount of tax for your situation.

Just fill out your ID information, and then it asks for your allowances.

>> It's not money you get from your parents.

It depends on how many people you're supporting with your paycheck.

>> W-4, W-4, W-4, W-4... >> If your check supports multiple people, such as family members, put the number of members down on the form, and less money will be taken as taxes.

But usually that's just for parents who have kids.

Now if it's just you, put down a one or a zero, and more money will be taken out.

But don't worry, you'll get most if not all of that money back later.

>> As your situation changes, you can change the amount of allowance anytime.

Just fill out another W-4 form, and in the meantime, welcome to your new job.

>> I...

I filed out my W-4 form.

It seemed to be pretty... pretty easy.

Your situation may be a little different.

>> The first thing we have to... the first thing we have to understand is you don't get your gross pay.

>> Substitute Teacher, did you just say your pay was gross?

>> No, my pay isn't gross.

Although sometimes when I think about what I have to put up with it does seem... but that's... that's not what I'm talking about.

>> So you get paid to be gross?

>> I don't get paid to be gross.

It's gross pay.

Gross pay is the pay before they take all the deductions away.

There's all these deductions that chip away at your pay, chip away with your money.

There's... there's medical insurance, union dues, taxes, taxes.

It all chip, chip, chip, chip, chip, chip, chip, chip, chip, chip, chip... ( bell ringing ) >> 'Sup everybody?

This is B-Girl Shorty.

This is my paycheck dance.

For me a B-girl is a lifestyle, it's a culture, a way of living.

So it's not only just the dance itself, but it's the way you dress.

Ready?

>> Ready.

>> The way you talk.

That would be dope.

The whole persona of yourself.

I mean, also a B-girl is somebody who has to get down.

The movie I just did, Step Up 2, was, like, a good seven something a day.

My gross income was 4,585 dollars and 75 cents.

Just got paid.

That's called your gross.

And then I had to give ten percent to my agency.

From there, taxes.

So when they take the taxes out I just cry and I go eat chocolate.

F-I-T was 1,075 dollars and 14 cents.

It's kind of sad.

The FICA was 258 dollars and 71 cents.

Oh, my goodness.

My medical tax-- wow-- was 60 dollars and 50 cents.

No dancing.

I got, after everything, 1,407 dollars and 92 cents.

Kills me every time I look at it.

It's hard but it's fun.

It's worth it.

It's worth all the hard work.

B-Girl Shorty.

>> Talking Dog Detective, episode fourteen.

"The Parralex Paycheck."

>> What can I do for you?

>> Okay, well, I work at this here ice cream store, see, selling ice cream treats and good things to eat.

>> Yes.

>> Now I'm supposed to make ten dollars an hour.

And last week I worked 20 hours, you understand?

At $200.

When they give me this check yesterday, there was 50 bucks missing.

Somebody stole my money.

>> A mystery.

I'm on the job.

Hmmm... >> What?

>> I see.

>> What?

>> It's all coming together.

>> What?

What is?

>> I've got it!

That money got taken out of your check by the government for taxes and social security.

It's going to help pay for roads and freeways, clean drinking water, fire and police departments, and stuff like that.

>> Wow!

>> That's amazing!

>> How in the world did you figure it out?

>> Wow.

>> That's amazing.

>> I'm the Talking Dog Detective.

>> He totally figured it out.

>> Hello.

I am here for my paycheck.

>> Almost ready.

There you are.

>> There seems to be a mistake.

>> Those are deductions.

>> What happened to my money?

Deduction?

I've got your deduction right... >> The first time I got my paycheck, there was a lot more stuff taken out than I had expected.

>> I work for the state, so there's a lot of deductions.

>> Social Security.

>> L and I tax.

>> Unemployment.

>> Income tax.

>> Then the number that you actually get is after they take all those three out.

>> Where exactly it goes, I have no idea.

>> FICA?

That's the Federal Ins... hold on, hold on.

>> FICA means... >> It'd be an F, an I, C, and an A, okay?

>> I don't know what the FICA one is.

>> I think that's a federal income tax.

>> To know where your money's going I think is very beneficial.

>> What's With Your Wages?

Where we check out your paycheck.

This installment: Federal Taxes.

>> The biggest deduction from most kids paychecks is called Federal Income Tax.

And it's listed as FED, Federal Tax, or Withholding.

>> That's the money that the government uses to pay for highways, the military, or programs for the poor.

>> As we said, this tax is also called Withholding, so the amount of money withheld from every check is based on what the government thinks your annual income will be, what your living situation is like, and several other factors.

>> At the end of the year when you file your tax return... >> Kids will usually fill out this very simple form.

But most kids don't make enough in a year to file for federal income tax.

>> Right.

The form is due April 15, and shortly thereafter, the government will send you a check for all the money they've withheld for you over the year.

That check is called your federal refund check.

>> Yes!

>> Remember, you're a Biz Kid.

>> Right.

Spend, save, donate.

>> And if you've managed to make enough money that the government has taken some from you, congratulations-- you really are a Biz Kid.

>> Hi, my name is Darrel.

I'm 16, and I work for the Upper Skagit Indian Community, and that's where I get my paychecks from.

This is where I live, and here comes my dog, Bunny, and my sister, Dranell.

I work as a wildlife technician.

And what that is basically is I do manual labor for our tribe.

Here's one of my jobs at the salmon hatchery.

Today I've got to go repair a fishing net.

I look through this fishing net, and if I see any holes, I repair it with some twine.

I get paid a paycheck twice a month.

I think that's how that works, yeah.

I get paid $7.93 per hour.

That's not very much.

That's just the youth rate.

And after all the taxes are gone, I actually only get $6.92 per hour.

This right here is a freezer that stores our tribe's fish.

This fish is about $80, and that's a lot of paychecks for me.

Here's my pay stub for this week.

And this week I worked two hours, I earned $15.86, and after all the taxes were taken out from the government, I really only took home $14.65.

For every dollar I earn, I only take home 88 cents.

Right now I'm going to bait our elk trap.

Well, our tribe does this, handles elks this way because they could either be hunted, they could die from traffic or starvation.

And this is just to ensure elk for future generations.

My yearly earnings for 2007 were $2,075.

That's that's just my gross.

Hi.

I'm here for my paycheck.

Out of all that, $101 went to income tax, and $159 went to Medicare and Social Security.

And so my net pay was actually $1,814.

I hope I get a raise this year, because the cost of living is going up.

No go home-- you're scaring the elk away.

>> What's With Your Wages?

Where we check out your paycheck.

This installment: Social Security.

>> Another tax that the federal government deducts from your paycheck is called Social Security.

And it's listed as Soc Sec or FICA.

They're one and the same.

>> This tax started during the Great Depression in the 1930s, and it transformed American culture.

>> Before Social Security, if you were too old to work, that was the end of your income.

>> If you were injured, that was the end of your income.

>> If you were born disabled and couldn't work, you had no income.

>> Social Security provides many benefits for people.

It's become sort of a national safety net.

And it provides things like retirement benefits, or disability insurance, or student aid.

>> We all pay.

I pay for you, you pay for me.

>> Everybody pays for everybody.

>> Not all of us will ever need or use Social Security.

>> But make sure you make wise choices when saving and investing.

>> And like we've said before, start young.

>> The one thing we know is that nothing is for certain.

But it is nice to know that if you need it, Social Security will be there for you.

>> Hi, I'm Lucy.

>> And I'm Isaac.

>> And we own the Inland Empire Auto Body and Paint.

>> But I'm the boss.

>> No, I'm the boss.

>> No, I'm the boss.

>> At Inland Empire Auto Body and Paint, we do collision repair, custom paint work, auto restoration, and auto detail.

>> Our detailing consists of engine wash, interior cleanup, exterior buff, and wax.

We get some nice, high-end cars, and then we get the regular little soccer mom vans, with stains everywhere.

The messiest car we've cleaned up?

Oh, we had a van which had a really bad smell in it and I think it was baby vomit.

Oh, ooh!

We know how to treat everything.

>> At Inland Empire Auto Body and Paint, what I do is administrate all the office work.

At the moment we have two floor employees, and we have about four that are independent contractors.

The difference between an employee and an independent contractor is that with an employee, we have to pay their taxes along with them paying their own taxes.

And with an independent contractor, we don't pay any taxes.

We just pay them for the job that they complete.

I manage the employees, and I have them fill out an application, a W-4 which helps take out their standard deduction taxes.

We also have them fill out an I-9 form.

Once we have the paperwork filled out, we fax it over to our payroll company.

We've decided to outsource our payroll because they know exactly how to do a paycheck so we won't get in trouble with the IRS.

They can take care of all the taxes.

For example, FICA, which is Social Security, the Federal tax, California taxes, and Medicare.

And that's why we hire the payroll company.

Now, for the independent contractors, we hire them to do the job.

Once they complete the job we give them a check, and by the end of the year, we just send them a 1099, where they pay their own taxes.

Part of being a boss is managing your employees.

You have to make sure that they get their work done, pay them for what they do, and keep a very good relationship with them.

>> Isaac, Sr, is one of our employees, and he's my dad.

>> We own Auto... wait.

Okay, sorry, one more time.

>> You laugh.

>> Hi, I'm Lucy.

>> And I'm Isaac.

>> And we own the Inland Empire Auto Body and Paint.

>> But I'm the boss.

>> No, I'm the boss.

>> No, I'm the boss.

>> Okay, we're both the boss.

>> Oh, hi.

I'm doing a lovely painting of my house here.

I'm putting all these pretty little windows in here.

Happy little garden trellis outside.

And here's my front door.

And, oh, there's somebody at the front door.

They're knocking on it right now.

I wonder who that could be.

I think it's someone from the Internal Revenue Service.

Yeah.

Yeah, I've talked to him before.

He wants to know why I haven't paid my taxes.

Tell you what.

I'm going to paint my back door of the house here, and here I am going out of the back door and I'm going out of it pretty fast like my pants are on fire.

>> What's With Your Wages?

Where we check out your paycheck.

This installment: Elective Deductions.

>> Some deductions you want taken out of your paycheck because they can help you.

A lot of them you can control whether or not they're coming out, and if so, how much.

>> We call these elective deductions, meaning they're your choice.

>> This includes things like health insurance, maybe a savings plan like a 401K, or maybe even life insurance.

>> Not every job offers these.

You might not get them offered if you work part time-- less than 40 hours a week.

Anyways, they're located on the deduction section of your pay stub, after federal, state, and local deductions.

>> But like we said, you probably want these.

For example, health insurance helps you pay for things like doctor visits.

>> A 401K plan gives you the chance to save up money for the future, which is always a good thing.

Sometimes you can ask for a portion of your paycheck to be deposited directly into a savings account.

>> These things are services your employer can offer you.

And they're called benefits, which are just fun things your job offers.

>> Kind of like the soda machines in the back.

>> Um... not quite.

They don't take money out of your paycheck for that, do they?

>> No.

And that's a good thing, because I drink a couple of those a day.

>> I'm doing my deductions.

Got another one.

>> Oh honey, why can't you be more like the 401K robot?

>> Huh?

>> A user submitted video.

>> I am the 401K robot.

Named after a section of U.S. Internal Revenue code.

I'll help you retire when you get really old.

I'm sponsored by your company, reallocated by trustees.

I am the 401K robot.

Now dance.

Space.

Dance.

Time.

Dance.

Space.

Dance.

Time.

I'm making money for you to use when you retire.

I'll do the roll over robotic moves that you desire.

Your employers match the funds I make.

It makes me want to dance all day.

I am the 401K robot.

Now dance.

>> Look, I know you're a little bit bummed out, dude.

I was.

They're called special deductions.

>> Special deductions?

>> I do like the life of a contractor.

You have to know how to promote yourself.

You are self employed, and you don't have to stick to just one thing.

You're not tied down.

I'm Michele Rowe and I'm 17 years old.

I'm a contractor, and as a contractor I do a number of different jobs.

I'm a model, an aspiring actress, and I do voiceover work in studios like this.

>> Rolling on take one.

>> Mmm.

Pass the mashed potatoes.

When I get my paycheck, I don't have any deductions taken off.

And so I have to make sure that I have money set aside so at the end of the year when I pay taxes, I will have money to pay those taxes.

Here's the check that I received from my agent.

When they pay me, I don't get the full amount, because I have to pay 20 percent commission for finding me the job.

This is from the voiceover work that I did.

I did two commercials, one TV commercial and one radio commercial.

It has no deductions on it because it just comes straight from her.

Means more money for me right now, but I have to set aside money for the end of the year to pay taxes.

When a person that is employed by a business gets their paycheck, they have deductions taken off.

Mmm.

Pass the butter and salt.

As a contractor, you have to make sure that your money is handled correctly.

It's more money for me, but it also means more taxes that I have to pay at the end of the year.

Contractors have to file a schedule C, which is a form that sums up all of your income and taxable deductions for a business.

I total up how much money I made throughout the year, and then I total up the amount of expenses that I had, and if they are business expenses I can take them off of my taxes.

I have a list of all my expenses.

These are all just business expenses.

I can't claim anything that didn't have to do with the business.

I have to pay for parking, clothing expenses, car repair, and my cell phone bill.

I've never cheated on my taxes.

If you did, you could get audited, and then you can be in big trouble with the government.

The amount that I've earned throughout the year minus the expenses is my taxable income.

It pays to keep track of your business expenses.

>> What's With Your Wages?

Where we check out your paycheck.

This installment: Special Deductions.

>> Some deductions from your paycheck are specific to where you work.

>> Cock-a-doodle-doo!

>> Some employers require you to purchase specific tools or uniforms that apply to the job you're doing.

These... >> Cock-a-doodle-doo!

>> These will show up as small deductions on your paycheck until you're all paid off.

>> Go away!

>> Cock-a-doodle-doo!

>> The bad news is that you have to pay.

>> There is some good news, though.

>> Who amongst you ordered Blackbeard's chicken burger with scurvy on the side?

>> Your newly purchased uniform can make a fabulous addition to your wardrobe.

>> Squawk!

>> Or for Halloween?

>> Cock-a-doodle-doo!

>> Get out of here!

>> And now it's time for today's Biz Kids Biz Quiz.

If you answered C, you're right, and you're thinking like a Biz Kid!

>> Welcome to Seattle Tae Kwon Do.

Hiya!

>> Tae Kwon Do is a martial art, and it originated from Korea.

We teach Tae Kwon Do classes.

>> There's all people, from four to six years old, to 12 and even, you know, in 60s.

>> We're going to teach everything from kicks and punches to flips, board breaking.

Paycheck, it's pretty simple.

We write down how many hours we work.

We work 50 hours in two weeks.

We write it down, we have little time charts that we have, and then we turn them in every two weeks, then we wait a couple days, then paycheck comes right in our inbox.

>> I usually look forward to it all the time.

>> Before I was working, it was just, you know, begging parents for money, grandma give you five dollars ten dollars here.

But a paycheck, you know you get a hundred dollars or more at a time.

>> Getting my first paycheck was really rewarding.

It's the most amount of money I've gotten in one sitting in a very long time.

>> When I got my first check it was...

I noticed, yeah, there was some deductions, but I was kind of expecting that.

My father told me, "You know, they do take money out from your paycheck every time you get one."

>> Like, for me, I didn't really know that about the deductions so I didn't really expect it.

So I look at the left side, and oh, it's a big number, and then I look further down and it's less, and I'm like, "Where did all that go?"

This is my very first check.

I had ten hours that I worked my first two weeks.

And then I made $7.35 an hour.

And that came out to a total of $73.50.

And I was really excited about that.

But then I see this side, the taxes and deductions, and it's a FICA tax, which is $5.62.

I look over here, and it's a bigger number, and then over here I see a smaller number.

So my total was $67.88 that I got to keep.

>> I also have a paycheck here.

I had 52 and a half hours for two weeks, so my total deductions for this period were $101.

>> Obviously I want all the money that I earn, but I understand that it's usual and that it's common.

>> It think my taxes go to stuff such as Social Security, the government, you know, stuff that they need for, you know, infrastructure, you know, building roads, that kind of stuff.

>> Now get out of here, Biz Kid!

>> Welcome to What's With Your Wages?

where we check out your paycheck.

This installment, the W-2 form.

>> All year long, people have been taking money out of your paycheck.

Can you believe that?

But fear not, intrepid worker.

All is not lost.

>> Unless you're making a lot of money, and I mean more money than most kids make, you'll get back a big chunk of the federal taxes that were taken out.

Most kids get back all of it.

>> At the end of the year, you'll get your W-2 form, which will show you how much money you made over the course of the year, and how much was taken out for taxes.

>> You can use this to file your tax return, which everybody has to file by April 15.

>> Another of the joys of working.

>> But it's still cool to get that W-2 and see how much money you made that year.

>> And that is one of the joys of working.

>> Wait a minute, you guys!

Today's my payday.

Later!

>> You've got to love that paycheck.

You earned it.

Just don't burn it.

>> Now, how often do you get a paycheck?

>> We get paid bimonthly.

>> There's deductions from my union, federal withholding, insurance.

>> I don't know what they take it out for exactly, but I know it goes somewhere.

>> What do they pay you to carry that badge around, 40 cents an hour?

>> That badge pays $464 a month.

That's what the job's worth.

I knew that when I hired on.

$67.40 comes out for withholding.

I give $27.84 for pension and $12 for widows and orphans.

That leaves me $356.76.

That badge is worth $1.82 an hour.

>> Yeah, my paycheck is usually, like, 200 dollars less than what it should be, which makes me angry.

>> I told everyone at the new ice cream place I was retiring, and they laughed at me.

>> ( grunting ) >> All right, so now you've heard some of our stories, and we want to here some of yours.

>> Maybe you or a friend have started your own business or thought of some ideas to help the community.

>> Yeah we want to hear about those.

So go to BizKids dot com and share the good news.

>> Who knows, maybe you'll end up right here on the show.

>> Well, not exactly right here, but yeah, on the show.

>> How about right here?

>> Mmm... no, not really.

>> How about right here?

>> No, not there.

>> How about right here?

>> Production funding and educational outreach for Biz Kids is provided by a coalition of America's credit unions, where people are worth more than money.

A complete list of individual credit union funders is available at wxxi.org.

>> Every day, America's credit unions help members with their financial needs and with programs like Invest in America.

It's only fitting that credit unions support Biz Kids because financial education is what we do.

Learn more at lovemycreditunion.org.

Captioned by Media Access Group at WGBH access.wgbh.org