Vocabulary: allowance annual leave annual leave loading appreciated value budget commission compound interest compounding period deduction dividend dividend yield double time earnings final amount franked dividend   goods and services tax (GST) gross pay/gross income income income tax inflation initial amount interest interest rate Medicare levy net pay overtime Pay As You Go (PAYG) Payment Summary penalty rate per annum (pa) percentage interest rate piecework principal refund royalty salary shares simple interest sliding scale tax deduction tax payable tax scale taxable income time-and-a-half wage

Basic concepts: calculate monthly, fortnightly, weekly, daily and hourly pay rates from a given salary calculate wages involving hourly rates, annual leave loading and penalty rates, describe the differences between salaries, wages and commissions calculate calculate earnings based on commission (including commission based on a sliding scale), piecework and royalties calculate payments based on government allowances and pensions, eg allowances for youth, tertiary study and travel determine deductions from income, eg tax instalments, superannuation contributions, health-fund instalments, union fees and HECS repayments calculate net pay following deductions from gross pay evaluate a prepared budget prepare a budget for a given income, taking into account fixed and discretionary spending.

Calculating Income 1 year = weeks = fortnights = months = days Employees may be paid for their work in a variety of ways. Most employees receive either a wage or a salary. A wage is based on a fixed rate per hour. Hours outside the normal work period are paid at a higher rate. A salary is a fixed annual (yearly) amount, usually paid fortnightly (two weekly) or monthly. There is no extra pay for hours outside the normal work period but time off ‘in lieu’ may be arranged. e.g. Phoebe has an annual salary of $22 039.85. How much is she paid: a) Weekly? b) Fortnightly? c) Monthly? d) Daily?

Jaz has casual work at a fast-food store. She is paid $8 Jaz has casual work at a fast-food store. She is paid $8.50 per hour Monday-Friday and $11.80 p/h on weekends. Calculate her total pay for a week in which she worked from 5.30pm to 10pm on Friday and from 6pm to 9.15pm on Saturday. Friday = Saturday = = = Total = =

Overtime and Allowances Overtime may be paid when an employee has exceeded their usual number of hours. It is generally paid at a higher rate than normal, often ‘time and a half’ (1.5 x normal rate) or ‘double time’ (2 x normal rate). Extra payments can also be made to employees in the form of bonuses and loadings. A loading can take the form of an addition to the normal hourly rate and may be for working in difficult or unpleasant conditions. Bonuses can be paid to employees and can take several forms. Most bonuses are percentages of salary or company profits. e.g. Lauren works as an electrician and receives $12.85 per hour for a 36-hour week. If Lauren has to work at 'heights' she receives 90c p/h height loading. Calculate Lauren's wage in a week where she works 15 hours at 'heights'. Income =

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Commission and Royalties Commission is usually paid to sales people and is calculated as a percentage of the amount of goods sold. Used car sales people and real estate agents are examples of people who are paid by commission. A retainer is the fixed amount paid to a sales person, regardless of how much they sell. Royalties are paid to people who own a copyright, like a song writer receives royalties based on how many cds are sold or an author receives royalties based on how many books they sell.

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Holiday Loading Holiday loading is an extra payment which is paid to employees at the start of their holidays. It is usually calculated as 17.5% of 4 weeks pay.

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Make sure you glue in the Youth Allowance chart!

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Deductions After your wage has been calculated, you don’t receive all that money. Out of your gross pay you must pay income tax, and you may choose to pay other things such as superannuation, union fees or social club fees. After all of these deductions have been made from your gross pay, the amount left that you actually receive is called your net pay. The first (and usually the largest) deduction from gross pay is tax. The site linked here is a tax calculator. Your employer will automatically deduct the due tax from your pay.

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Budgeting A budget is a plan to help you manage your money, enabling you to save and manage emergency costs. Hopefully it will help you stay out of debt…To make a budget, you must calculate all income and all expenditure. The difference between them is the amount which can be saved, or how far in debt (if the expenditure is greater than income).

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