 What is a pay cheque?  One of the most important documents you encounter regularly when living independently is your pay cheque. To be sure that mistakes.

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Presentation transcript:

 What is a pay cheque?  One of the most important documents you encounter regularly when living independently is your pay cheque. To be sure that mistakes are not made on your pay cheque, it is important that you review it when you receive it and that you understand what it tells you.  Understanding the difference between gross income and net income is essential to deciphering your pay statement.

 Gross income = Income before deductions have been taken off  Gross income can be calculated in several different manners. It can be a salary that is paid in equal increments, an hourly wage, a flat rate/piece rate, or a commission on a sale.  If a person works longer than the maximum work week, they can be paid overtime wages. Overtime is usually paid out at the rate of “time and a half” meaning it is calculated as one and a half times the regular rate of pay. Sometimes it is “double time” meaning it is two times the regular rate of pay.

Calculate the gross pay for each employee in the ABC Toy Company: a. Adam Scott worked 36 $11.85 per hour. b. Joan Li is on salary at $35,000 per year. How much is her gross salary if paid monthly? How much is her gross salary if paid bi-weekly? 1c. Karma Fayad assembled 1,975 toys at a rate of $0.35 per toy. Adam Scott earned $ Joan Li would be paid $ per month, or $ every two weeks. Karma Fayad was paid $

Adam Scott earned $ Calculate the overtime pay for the following employees assuming the rate to be time and a half: a) Ming - $7.00 Ming would be paid $15.45 per hour for overtime.

Adam Scott earned $ Assuming an average work week to be 40 hours, complete the following table to determine the final gross pay (assume overtime is paid at the rate of time and a half): Total Hours Regular Rate Regular Hours Overtime Hours Regular Pay Overtime pay Gross Pay 46$ $ $ $ $ $563.50

 All pay cheques have standard deductions that are taken off the gross pay.  Net Income = Income after deductions.  In fact, your employer is required by law to withhold specific amounts of money from your pay cheque for certain things.  Some of the other deductions that are taken from your pay are optional and you determine if they are taken off or not. And some deductions are taken off very infrequently, perhaps only once a year.  Knowing what the deductions are and why they are being collected can help you understand where all your money goes and having that knowledge helps you to be sure that you are being paid what you are rightfully entitled to receive.

Typical deductions from your pay cheque include:  Accident Insurance  Canada Pension Plan (4.95% of gross income)  Charitable Contributions  Dental Insurance  Employment Insurance (1.88% of gross income)  Federation/Union Dues  Health Insurance  Income Tax (15%-29% of gross income depending on amount of income earned)  Life Insurance  Long Term Disability Insurance  Payments to Accounts Receivable  There may be other deductions that are specific to the workplace like a uniform cleaning, professional organization membership, etc.

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