1. Earning and managing money Cambridge Study guide 1. Earning and managing money Mathematics General Preliminary
Salary and wages Salary is a payment for a year’s work which is then divided into equal monthly, fortnightly or weekly payments. 1 year = 52 weeks 1 year = 26 fortnights 1 year = 12 months Wage is a payment for work that is calculated on an hourly basis. HSC Hint – Be careful converting time periods. Most months have more than 28 days (4 weeks).
Overtime and casual rates Overtime is work beyond the normal working day. Time-and-a-half rate = normal rate × 1.5 Double time rate = normal rate × 2 Casual rate is set amount paid for each hour’s work. HSC Hint – Check overtime hours and normal hours add to the total hours worked in the week.
Annual leave loading and bonuses Annual leave or holiday loading is the payment for going on holidays. Holiday loading = 17½% × normal weekly pay × weeks leave. Bonus is an extra payment or gift earned as a reward. HSC Hint – Add the holiday loading to the normal pay to determine the pay for the holiday.
Commission Commission is the percentage of the value of the goods sold. Advantages Higher sales increase the income. May receive a small payment (retainer) plus the commission. Disadvantages Income may vary each week. Competition for customers is usually high. HSC Hint – Commissions can be calculated on a sliding scale. Check your sales are correct.
Piecework, royalties and government income Piecework is payment for work completed. Piecework = Number of units of work × Amount paid per unit. Royalty is a percentage of the goods sold or profit received. Income received from government includes pensions, allowances or benefits. HSC Hint – Check units of measurement are consistent to ensure piecework payments are accurate.
Gross pay, net pay and deductions Gross pay is the total of the employee’s pay including allowances, overtime pay, commissions and bonuses. Deductions is the regular amount of money subtracted from a person’s wage or salary such as income tax. Net pay equals gross pay minus deductions. Net pay = Gross pay - Deductions HSC Hint – Deductions and allowable deductions for taxation are different concepts.
Budgeting Budgeting – balancing of income and expenses. Budgets are created for a specified time such as weekly. Creating a budget List all the income categories. List all the expense categories. Calculate the total of the income and expenses categories Balance the budget by modifying the categories or by entering a balance category. HSC Hint – Check all calculations in the budget are for the same specified time.