Earning Income How Can I Get Paid?

How Much Is My Check? Kelsey just turned 18 and started a new job at Sally Sue’s Grill as a waitress. She will get paid $6/hr. and work 12 hours/week. After Kelsey’s first two weeks of work, she worked 24 hours and received $50 in tips. When she received her paycheck, she became extremely confused because her check was only $135. Why was she so confused? How would you explain the situation to her? Gross Income total amount of income from your wages or salary before payroll deductions Net Income amount of your paycheck after all deductions have been taken out—”Take-Home Pay”

2 Common Methods of Getting Paid Paycheck Most common method Employee responsible for handling the paycheck Immediately see payroll stub and deductions Direct Deposit Employers directly deposit employee’s paycheck into the authorized employee’s bank account Employee receives the paycheck stub detailing the paycheck deductions Most secure because there is no direct handling of the check Employee knows exactly when paycheck will be deposited and available

Number of Paychecks in One Year When Do I Get Paid? Why is it important to know when you get paid? Budgeting What is a pay period? Length of time for which an employee’s wages are calculated Pay Periods Type of Pay Period How Often Paid Number of Paychecks in One Year Weekly Once a week 52 Biweekly Every two weeks 26 Semi-monthly Twice a month 24 Monthly Once a month 12

How Can I Get Paid? Types of Pay Type of Pay Description/Comments Adv/Disadv Hourly Wages You earn so many dollars per hour worked. ? Salary You receive a fixed rate of pay for each pay period. This may or may not be related to the number of hours worked. Commission You earn a percentage of the amount of sales you make. Others Tips, Rent, Piecework

How Can I Get Paid? Salary Weekly BiWeekly Semi-Monthly Monthly $923 You receive a fixed rate of pay for each pay period. This may or may not be related to the number of hours worked If your salary was $48,000 per year, what would your gross income be if paid in the following time periods? Weekly BiWeekly Semi-Monthly Monthly $923 $1,846 $2,000 $4,000

How Can I Get Paid? Hourly Overtime You earn so many dollars per hour worked Example: Jim earns $12/hr and worked 35 hours Example: Sally earns $20/hr and worked 20 hours Overtime Pay received for over 40 hours/wk at time and one-half Example: Bob earns $20/hr. He worked 47 hours this week. What is his gross income? Pay = (40 hours x $20) + (7 hours x ($20 x 1.5)) = $1,010 Example: Keith earns $12/hr. His company pays overtime on any time over eight hours per day. He worked a total of 40 hours this week but on Monday worked 12 hours. What is his gross income? Pay = (36 hours x $12) + (4 hours x ($12 x 1.5)) = $504

How Can I Get Paid? Commission Example You earn a percentage of the amount of sales you make Example Betty sells insurance. She averaged 32 hours/wk for the month. Her monthly sales totaled $60,000. Her company pays her 8% of total sales. What is her gross income? Pay = $60,000 x 8% = $4,800 Katie works at the local sporting goods store 16 hours/wk. Her sales last week totaled $2,500. The store pays her a commission rate of 5%. What is her gross income? Pay = $2,500 x 5% = $125

How Can I Get Paid? Tips Rent Piecework “extra” money from customers for performing services Rent money earned from allowing others to use real estate Piecework pay based on number of items produced Example: Sheila gets paid $50 for each piece of furniture she assembles without flaws. This week, she produced 15 pieces of furniture, twelve of which were without flaws. Pay = 12 pieces x $50 = $600

Review What is Gross Income? Net Income? Gross=income before deductions Net=income after payroll deductions What 2 methods are used to pay employees? paycheck, direct deposit What is a pay period and why should you know when you get paid? Length of time for which an employee’s wages are calculated

Review What are the different ways wages can be calculated? Salary: You receive a fixed rate of pay for each pay period. This may or may not be related to the number of hours worked Hourly: You earn so many dollars per hour worked Commission: earn a percentage of sales Tips, rent, piecework

Assignment Calculating Wages worksheet Schulthies & Kaczmarski. Business Math, Southwestern, 2003, pgs. 1, 5, 6, 8.