1. Employee Benefits Companies must consider many personnel costs. These costs include employee benefits, such as health insurance and vacation days. What are other employee benefits?

2. Lesson Objective Compute the new salary after merit increase and cost-of-living adjustment. Content Vocabulary salary scale A table of wages or salaries that compares various jobs in a company, used to estimate the costs of giving an employee a cost-of-living adjustment or a merit increase. cost-of-living adjustment merit increase cost-of-living adjustment A raise in an employees salary to help keep up with inflation. merit increase A raise in salary to reward an employee for the quality of work.

4. Elaine Taylor is a systems analyst (salary level 2 position) for EPD Inc. The executive board of EPD voted to give all employees a cost-of-living adjustment of 2.8 percent. In addition, Taylor was awarded a merit increase of 3.5 percent. What will Taylors salary be for the coming year? Example 1

5. Find the present salary from Figure 13.1 below. Example 1 Answer: Step 1

6. The present salary is $40,000. Figure 13.1

7. Find the cost-of-living adjustment. Salary × Cost-of-Living Adjustment Percent $40,000 × 2.8% = $1,120 Example 1 Answer: Step 2

8. Find the merit increase. Salary × Merit Increase Percent $40,000 × 3.5% = $1,400 Example 1 Answer: Step 3

9. Find the new salary. Present + Cost-of-Living + Merit Salary Adjustment Increase $40,000 + $1,120 + $1,400 = $42,520 Example 1 Answer: Step 4

10. DMarco Mullin is a computer operator, salary level 3, for EPD Inc. He received a 2.8 percent cost-of-living adjustment and a merit increase of 4 percent. What is Mullins new salary? Example 2

11. Find the present salary from Figure 13.1 below. Example 2 Answer: Step 1

12. The present salary is $38,500. Figure 13.1

13. Find the cost of living adjustment. Salary × Cost-of-Living Adjustment Percent $38,500 × 2.8% = $1,078 Example 2 Answer: Step 2

14. Find the merit increase. Salary × Merit Increase Percent $38,500 × 4% = $1,540 Example 2 Answer: Step 3

15. Find the new salary. Present + Cost-of-Living + Merit Salary Adjustment Increase $38,500 + $1,078 + $1,540 = $41,118 Example 2 Answer: Step 4

16. Mark Webb earns $10.70 an hour. He receives a merit increase of 4.5 percent. What is his new hourly rate? Practice 1

17. $11.18 Practice 1 Answer

18. Kendra Gomez earned $48,214 last year. This year she receives a cost-of-living adjustment of 4.2 percent and a merit increase of 2.9 percent. What is her new salary? Practice 2

19. $51,637.19 Practice 2 Answer