1. 1 Earning Money - Contents 1.SalarySalary 2.WagesWages 3.CommissionCommission 4.RoyaltiesRoyalties 5.PieceworkPiecework 6.OvertimeOvertime 7.Addition & DeductionsAddition & Deductions 8.BudgetingBudgeting

2. 2 1A Salary (1/1) Salary is paid on an annual basis. To calculate a monthly pay (÷12) To calculate a fortnightly pay (÷26) To calculate a weekly pay (÷52) Example: John earns an annual salary of $75 000 p.a. Calculate his monthly, fortnightly and weekly pay. Monthly pay = 75 000 ÷ 12 =$6450.00 Fortnightly pay = 75 000 ÷ 26 =$2884.62 Weekly pay = 75 000 ÷ 52 =$1442.31

3. 3 1B Wages (1/4) Wages are paid on an hourly basis. To calculate wages we multiply the hourly rate by the number of hours. To calculate hourly rate we divide the wage by the number of hours. To calculate number of hours we divide the wage by the hourly rate. An additional allowance is paid for working under unfavourable conditions. Casual rates are higher than normal rates of pay as no sick leave or holiday pay is usually paid.

4. 4 1B Wages (2/4) To calculate wages we multiply the hourly rate by the number of hours. Example 1: How much is Bob’s wage if he earns $37/hour for 40 hours? Pay =37  Hourly Rate x 40  Number of hours. = $1480

5. 5 1B Wages (3/4) To calculate hourly rate we divide the wage by the number of hours. Example 2: What is Bob’s hourly rate if he earns $1 480 for a 40 hour week? Hourly rate = 1480  Wage ÷ 40  Number of hours. = $37/hr

6. 6 1B Wages (4/4) To calculate number of hours we divide the wage by the hourly rate. Example 3: How many hours does Bob’s need to work if he wants to earn $1 480 at $37/hour? Hours = 1480  Wage ÷ 37  Hourly Rate. = 40 hours

7. 7 1C Commission (1/) A commission is paid as a percentage of an employees sales. A retainer is a fixed payment,to keep a salesman, irrespective of sales. Commision may be paid on a sliding scale. E.g. 5% of the first $10 000 and 2.5% of the balance. or 0% of the first $10 000 and 2.5% of the balance.

8. 8 1C Commission (2/) Example 1: Sarah earns a commission of 4% on sales of $50 000. What is her commission? Commission = 0.04  4% as a decimal (Rate of commission) x 50 000  Sales = $2 000

9. 9 1C Commission (3/) Example 2: John earns a commission of 5% on sales up to $150 000 and 2.5% of the balance. What is his commission on sales of $400 000? Commission = 0.05  5% as a decimal (Rate of commission) x 150 000  Basic Sales + 0.025  2.5% as a decimal x (400 000 – 150 000)  Balance in excess of $150 000 = $13 750

10. 10 1C Commission (4/) Example 3: Jane is paid a retainer of $500 and earns a commission of 3% on sales over $3 000. What is her commission on sales of $5 600? Earnings = 500  Retainer + 0.03  3% as a decimal x (5 600 – 3 000)  Balance over $3 000 = $578

11. 11 1C Royalties (5/5) A Royalty is a payment to someone who owns the copyright of a product. It is usually paid as a percentage of sales in a similar way to a commission. Example: An Author is paid 4% of all sales of his book. What are the Royalties on sales of $250 000? Royalties = 0.04 x 250000 =$10 000

12. 12 1D Piecework (1/1) Piecework is when a person gets paid for the amount of work completed. Example: Bob is paid $27 for each model boat he builds. How much is he paid if he builds 20 boats? Piecework = 27 x 20 =$540

13. 13 Overtime Overtime is paid when you work more than the normal number of hours in a week. Overtime can be paid at: a) Time-and-a-half (x1.5) b) Double time (x 2) Normal time is what you get paid for the standard number of hours in a working week.

14. 14 Overtime Pay = 40 x 30 x 1  Hours  Pay Rate  Normal Time + 2 x 30 x 1.5  Hours  Pay Rate  Time-and-a-half + 3 x 30 x 2  Hours  Pay Rate  Double Time = $1 480 Example: Calculate the pay for a person who works 40 hours Normal Time, 2 hours at Time-and-a-half and 3 hours at Double time. He is paid $30/hr for a normal week.

15. 15 Additions & Deductions from Gross Pay Gross Payis the pay before any deductions are made. Net Payis the pay after deductions are made. Net Pay = Gross Pay - Deductions Some deduction are calculated on an annual basis and deducted weekly (÷52) or fortnightly (÷26). Some deduction are calculated as a percentage of gross earnings. Holiday Loading Some employees are paid 17 1 / 2 % of their gross pay for four weeks when they take their annual leave.

16. 16 Additions & Deductions from Gross Pay Example 1: Ben has a gross income of $500 per week. He has $125 deducted for tax and $75 for superanuation. Calculate his Net income. Net Income =  Label 500 – 125 – 75 = $300  Calculation  Answer with units.

17. 17 Additions & Deductions from Gross Pay Example 2: Mary has annual union fees of $605.80. Calculate her fortnightly deduction. Fortnightly Deduction =  Label 605.8 ÷ 26 = $23.30  Calculation  Answer with units.

18. 18 Additions & Deductions from Gross Pay Example 3: George earns $650 per week. He pays 4% as a contribution to superanuation. Calculate his contribution. Super Contribution =  Label 0.04 x 650 = $26.00  Calculation  Answer with units.

19. 19 Additions & Deductions from Gross Pay Example 4: Gabriel earns $1450 per week. He receives 17.5% of four weeks as a Holiday Loading in addition to his normal pay.. Calculate his holiday pay for 4 weeks. Holiday Loading =  Label 0.175 x 4 x 1450 = $1015.00  Calculation  Answer with units. Holiday Pay =  Label 1450 x 4 + 1015 = $6815.00  Calculation  Answer with units.

20. 20 Budgeting A statement of income and expenditure. If income and expenditure are equal then the budget is said to be in balance. When creating a budget all amounts should be over the same period. Monthly, fortnightly or weekly. Al unspent money should be considered as savings.

21. 21 Budgeting Drawing up a Budget IncomeExpenditure Wages$950 Mortgage$276.92 $110.00 $250.00 $ 70.00 $163.08 $950.00 Bills Groceries Car Savings Total $950 Income = Expenditure