1. Earning Income
How Can I Get Paid?

2. 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”

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

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