1. Convert \frac{5}{4} to a common denominator of 8: \frac{5}{4} = \frac{10}{8}.
2. Perform the subtraction: \frac{10}{8} - \frac{5}{8}.
3. Subtract the numerators: 10 - 5 = 5.
4. Write the result as a fraction: \frac{5}{8}.
So, \frac{5}{4} - \frac{5}{8} = \frac{5}{8}.