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Objectives: -List and discuss types of earned income, such as wages, salaries, tips, and commissions. -Discuss the advantages and disadvantages of self-employment.

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Presentation on theme: "Objectives: -List and discuss types of earned income, such as wages, salaries, tips, and commissions. -Discuss the advantages and disadvantages of self-employment."— Presentation transcript:

1 Objectives: -List and discuss types of earned income, such as wages, salaries, tips, and commissions. -Discuss the advantages and disadvantages of self-employment. -Describe employee benefits and their role in employee compensation.

2  Occupational Handbook Assignments  Late  Will accept if handed in by Friday (tomorrow)  Resume  Update  Due Monday, Jan. 19

3  Working for an hourly wage  Working for an annual salary  Tips and Commissions  Self-employed – work for themselves  All earned income is subject to income taxes and social security taxes  A tax is a required payment to support the government

4  Minimum wage is the lowest pay rate allowed by law  New employees usually begin at minimum wage because they lack the experience and education  Federal Minimum Wage is $7.25 – hasn’t been raised since 2009.  Nebraska Minimum Wage is $8.00 (as of Jan. 1, 2014)  Jan. 1, 2016 – will go to $9.00

5  Overtime pay is received for hours worked in addition to regular hours (usually 40 hours a week).  By law, employers must be paid at least 1 ½ times the regular rate for overtime pay.  Ex. If regular pay is $10 overtime pay would be ___  $15

6  A Salary is a fixed annual or monthly rate that is the same regardless of the hours worked.  Do not keep time cards or count hours worked.  Have flexibility in the times they work than do hourly workers.  Do not receive overtime pay for working more that 40 hours a week.

7  A tip is a gift of money  Often a percentage of the total bill  Given to a person that performs a service  Usually based on the quality of services provided  Tips are subject to taxes  May have to share tips with co-workers  What kind of workers receive tips

8  A commission is a set fee or a percentage of a sale paid to an employee instead of or in addition to salary or wages.  A commission is only earned when a sale is made  Some jobs pay commission only  Some jobs pay a base salary plus commission

9  Self-employment is working for yourself  An entrepreneur is a person who takes the risks of being self-employed and owning a business  Advantages  Get to make all the decisions  Set your own hours – when and how long you work  Get to keep all profits from the business  Disadvantages  If the business fails, it’s your money you lost.  Many time you have to use your own personal credit  Often have to put in long hours – can’t always afford to pay others to work for you.

10  Read together pg. 44

11  Benefits are forms of pay other than salary or wages.  Examples:  Paid vacation and holidays  Sick leave and personal leave  Educational benefits  Health insurance and other insurance  Retirement plans  Profit sharing plans or Stock option plans  Benefits increase the overall value a worker receives from a job  Benefits can increase disposable income – money available to spend or save after taxes have been paid.  Benefits add to our standard of living and most of them are not taxable.

12  Pay without work refers to times when an employee who is not working will be paid.  Examples:  Paid vacation  Paid holidays  Paid sick leave  Paid personal leave

13  Some employers provide plans that will pay for, share the cost of, or reimburse money spent on education.  Employees can add to their general employability and skill set in addition to becoming more valuable to their current or future employer.

14  Health insurance – in the past, many employers paid the full premium for employees.  Because the cost of health care has risen rapidly, the cost of health insurance has also risen.  Today, many employers pay only a portion of the health insurance  Life insurance – some employers offer group life insurance to its workers.  Disability insurance – provides payments to replace income lost when illness or injury prevents the employee from working.  Worker’s compensation – insurance plan required by law for employers to provide.  It pays medical and disability benefits to workers who are injured or contract diseases on the job.

15  A retirement plan is an account into which employees contribute a portion of their earnings for their retirement; employers may match these contributions.  Two types:  401(k) plan allows employees to make tax-deferred contributions, which may be matched by employers  Pension plans are paid entirely by the employer

16  A profit-sharing plan allows employees to share in the profits of the business  The bonus may be paid in cash, or it may be added to a retirement account.  Profit sharing plans help motivate employees to achieve company goals  Some companies allow employees to buy stock in the company at a reduced price.  Companies may also issue stock as a bonus

17  A health spending account (Flex 125 plan) allows employees to set aside money (pre-tax) to pay for qualified medical expenses.  Employees can set aside pretax dollars to pay for deductibles and copays.  A health savings account (HSA) can be used be employees who have high-deductible health insurance plans.  Employer also can contribute to the HAS  Increasingly popular high-deductible insurance plans have cheaper premiums. Part of the premium savings can be put into an HSA, and employees can contribute with pretax dollars to cover their out-of-pocket costs for medical care.

18  Due Monday, Jan. 19 – question 1-21 on pg. 49  Also due Monday – updated resumes  Read Lesson 2-2 pg. 51-58 for Monday  Tomorrow – Friday, you will complete the Higher Education Module in Everfi.com


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