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Personal Finance: Module 1 Lesson 3 Determining Your Destiny
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Determining Your Destiny Slide 2 What is employee compensation? It is the total amount of pay provided to an employee in exchange for services performed. Employees can be paid in two ways: Direct (monetary) Indirect (non-monetary) Video: Overview of Employment Compensation Understanding Employee Compensation
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Types of monetary compensation Determining Your Destiny Slide 3 Salary Wages Overtime Commission Tips Bonuses Entrepreneurship
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Salary, wages, and overtime Salary – a fixed amount paid each pay period no matter how many hours were actually worked Wages – usually received as an hourly, daily or weekly rate of pay; fluctuates based on the actual amount of time the employee worked during the pay period Overtime – pay for hours worked over 40 hours in a week paid at the rate of at least one and one-half the employee’s regular rate of pay Determining Your Destiny Slide 4
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Commission, tips, and bonuses Commission – a common way to pay sales people. Usually a percentage of the total price of the product or services sold during a pay period Tips – an extra amount a customer pays to reward service workers for providing quality service Bonuses - an amount paid in addition to regular pay to reward good performance by the employee, company, or both Determining Your Destiny Slide 5
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Entrepreneurship (self employment) Determining Your Destiny Slide 6 A person works for him- or herself and owns the business Self-employment income, called profit, is money left over once all business expenses are paid
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Employee benefits “ ” Determining Your Destiny Slide 7 Indirect or non-monetary compensation provided to employees (by their employer) in addition to wages, salary and tips College Grad Evaluating Your Benefits Package
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Basic types of employee benefits Paid leave Group insurance Retirement plans Educational assistance program Profit-sharing and stock options Determining Your Destiny Slide 8
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Types of paid leave Determining Your Destiny Slide 9 Holiday pay – worker is paid for certain holidays when the place of employment is closed Sick leave – worker is paid even though he or she is not at work due to illness Personal/annual leave – worker is paid even though he or she is not at work because of personal reasons
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Group insurance Determining Your Destiny Slide 10 Group Health Insurance – employer-sponsored insurance that helps provide protection against the costs of medical services and may include dental and vision options. Employment Benefits Flexible Spending Accounts Flexible Spending Accounts (FSA) – money that is deducted from an employee’s paycheck to pay health care expenses not covered by insurance
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Group insurance Determining Your Destiny Slide 11 Group Life Insurance provides benefits to dependents and/or others you name in the case of your death Group disability insurance replaces lost wages or income if you are unable to work Short-term disability replaces a portion of income for up to six months Long-term disability replaces a portion of income for longer than six months
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Comparing employee benefits Determining Your Destiny Slide 12 Worksheets Health Insurance Cost Compare Employee Benefits Links and Activities Benefits Wizard
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Employer-sponsored plans help employees be better prepared for a time when they are retired and no longer working. 401(k) Plans – employee chooses how much money to deduct from each paycheck and how to invest it Many employers will offer to match a portion of the employee’s contribution! Begin Providing for Your Future Pension Plans – retirement accounts funded entirely by the employer Value varies depending on years worked, salary, etc. Retirement plans Determining Your Destiny Slide 13
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Educational assistance program An employee benefit wherein some or all educational expenses are funded by the employer Policies are set by employer May extend to family members Determining Your Destiny Slide 14 College access tip! Having part or all of your education paid for by an employer is a valuable benefit!
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Profit sharing and stock options Profit-sharing – employees are paid a share of the company’s profit Stock options – employees receive stock in the company at a discounted price Determining Your Destiny Slide 15
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Step with care and great tact and remember that Life’s a Great Balancing Act. Determining Your Destiny Slide 16 Oh, the Places You’ll Go! by Dr. Seuss “ ”
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Work-life balance Determining Your Destiny Slide 17 We all deserve to be able to balance our careers with rewarding personal lives! Employees who feel they have a better work-life balance tend to work 21% harder. Find out as much as you can before deciding if a career opportunity is right for you: o Flexible work schedule o On-call or overtime o Overnight travel o Family emergencies o Commute time
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For this project, the PR/Award Number is V215W100015 and the Department of Education is the funding agency. This information is provided for the reader's convenience. Tennessee and U.S. Department of Education are not responsible for controlling or guaranteeing the accuracy, relevance, timeliness, or completeness of this information. Further, the inclusion of information or Web site address does not reflect the importance of the organization, nor is it intended to endorse any views expressed, or products or services offered. Financial Education for College Access and Success Determining Your Destiny Slide 18
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