Chapter 1 Gross Pay 1 1 Hourly Pay

Chapter 1 Gross Pay

1 -1 Hourly Pay Gross Pay for Hourly-Rate Employees – People who work for others Employer – The person or company and employee works for. Hourly Rate - a certain amount of money a person is paid per hour they work. EX: A worker at Mc. Donald’s makes $7. 35 and hour for every hour they work.

1 -1 Hourly Pay Gross Pay – the total amount of money that an employee is paid…this is also called total earnings. Ex: 5 hours worked @ &7. 35 per hour = 5 x $7. 35 = $36. 75 Gross Pay = hours worked x hourly rate

Recording Hours Worked… l Many companies pay people based on a quarter or a tenth of an hour… – – For example…if a company pays based on the quarter or every 15 minutes, you might be docked a quarter hour of pay if you are 3 -4 minutes late. For example…if a company pays based on the tenth, you will be docked 1/10 if you are 3 -4 minutes late…. you are docked based on 6 minute increments.

What is meant by Overtime? l l l Most of the time, overtime is any hours worked over 40 hours a week. Most people are paid time and ½ for every hour worked over 40 hours a week. To calculate: – Pay per hour x 1. 5 * number of hours over 40, then add it to the regular amount of pay earned.

To calculate gross pay with overtime hours: l l l If the employee works more than 40 hours, take 40 x $rate per hour to find regular pay. Calculate OT hours = Take number of hours worked – 40 Calculate OT rate = $rate per hour x 1. 5 Multiply the OT rate x OT hours = OT pay Add OT pay to regular pay = gross pay

Try these… l Tom worked 45 hours and earns $10. 00 an hour. How much is his gross pay for the week? 1. 2. 3. 4. 5. 40 x $10. 00 = $400 …this is his regular pay 45 – 40 = 5 OT hours $10. 00 x 1. 5 = $15. 00 which is his OT rate $15. 00 x 5 = $75. 00…this is his OT pay His gross pay is $400 + $75. 00 = $475. 00

$ 624. 00 $ 1, 160. 00 Try these… l l l $ 579. 00 Sue worked 48 hours and earns $12. 00 an hour. How much is her gross pay for the week? Joel worked 52 hours and earns $20. 00 an hour. How much is his gross pay for the week? Lori worked 45 ½ hours and earns $12. 00 an hour. How much is her gross pay for the week?

Gross Pay for Salaried Employees l l Salaried employees are paid a fixed amount of money for each time period…. their paycheck doesn’t change. Ex: Tom is paid $400 per week, how much does Tom make in a month…$400 * 4 = $1, 600

1 -2 Salary – When people get paid a stated amount per year and this is paid in equal amounts per paycheck. Negatives: l Doesn’t matter how many hours you work per week Positives: l Security of getting a good paycheck.

What is a Percent or Percentage? l A percentage is a mathematical way of expressing a number. The number being expressed can be considered a fraction, a part of a whole or an amount in comparison to one hundred. The word "percent" is short for the longer "percentage, " and means "per one hundred. " Percent numbers are expressed in many different ways and many forms, and can be computed in a variety of ways. They are often accompanied by a percentage sign.

What is a Percent or Percentage? 20% - a percent is a representation of a portion of a whole…it is always based on an entire amount of 100% of something. l A percent is known as a ratio amount of something else. For example, if you have 3% of $100. 00, you now have $3. 00. To get this number divide the percentage into the whole number. So, for this equation, it would have been 3/100.

1 -3 Commission – there are 3 types Commission – is a fee or percentage of interest paid for sales made. A commission may be an amount for each item sold, or it may be a percent of the dollar value of sales. 1. Straight commission – when sales people are ONLY paid commission…. they don’t get paid a salary or wage per hour worked. They can also be paid per item sold.

1 -3 Commission – con’t Straight commission To Calculate = Rate of commission x quantity sold = $commission pay EX. Earl Brown sells greeting cards and is paid a straight 1. commission of $0. 75 on each box of cards he sells. During March, he sold 145 boxes. Find his commission. $0. 75 x 145 = $108. 75

1 -3 Commission – con’t EX. Terri Smith is paid a straight commission of 5% on her sales. During September, her sales were $32, 000. What was her commission? 5% (OR. 05) x $32, 000 = $1, 600. 00 Get your white boards, a marker and do #A – C on page 15. . then show answers to Mrs. P.

1 -3 Commission – con’t 2. Commission based on quota – The amount of sales a salesperson must sell before they make any money for commission. (Salespersons may also be paid a salary in addition to commission. ) Ex: Clark is a salesperson that works on straight commission, however, before he makes any money, he must reach a quota of $3, 000. 00 in sales. Last month he sold $5, 900. 00 worth of goods and gets paid a commission rate of 5%. What was his gross income? $5, 900. 00 - $3, 000. 00 = $2, 900. 00 x. 05 = $ 145

1 -3 Commission – con’t Brain Teaser… Clark is a salesperson that works on straight commission, however, before he makes any money, he must reach a quota of $3, 000. 00 in sales. Last month he sold $2, 900. 00 worth of goods and gets paid a commission rate of 5%. What was his gross income?

1 -3 Commission – con’t Ex: Sue is a salesperson that works on salary plus 8% commission, however, she has a quota to reach of $4, 000. 00 before she makes any commission money. Last month she sold $10, 000. 00 in sales and she earns a salary of $500 a month. What was her gross pay? $10, 000. 00 - $4, 000. 00 = $6, 000. 00 x. 08 = $480 (commission) $480 + $500 (salary) = $980. 00 Using your white boards, # E & F on page 16 show answers to Mrs. P. . 00

1 -3 Commission – con’t 3. Graduated Commission - when salespersons rate of commission increases as their sales increase. Ex: The rate may be 3% on the first $12, 000 of sales, 4% on the next $6, 000 and sales over $18, 000…graduated commission can also be on the number of units sold. Look at Example # 4 on page 16. .

1 -3 Commission – con’t Bob works on a graduated commission listed below; he sold $7, 450. 00 worth of goods this month, what was his gross income? l 3% on first $3, 000 l 5% on second $2, 000 l 7% on anything over $5, 000

2 -2 Finding Gross Pay l l Gross pay is earned by employees who are paid by the hour and you calculate it by multiplying the pay per hour by the number of hours worked. Ex: $8. 50 x 20 hours worked = $170. 00

In summary…commission is the more you sell, the more money you make. A. Sales x ___% = Commission OR B. # of units sold x Money made per unit = $Commission

Solving for a Variable… Typically we figure commission as _____ X ____% = $ _____ Sales com. Rate com. Money But what if you didn’t know com rate, but know commission $? Sue sold $56, 000 and makes 5%, how much commission did she make? Sue made $2, 800. 00 in commission on $56, 000 in sales, what was her commission rate?

1 -4 Other Wage Plans 1. Piece-rate employees - Some employees are paid for each item or product successfully made. l Ex: Tom makes $70 for each bike he makes, if he makes 40 bikes, he makes $280. 00. l Look on page 21 #A and B

1 -4 Other Wage Plans 2. Per Diem Employees – Per diem means per day…some employees are paid for every day they work…. these are usually part time or temporary employees…also known as temp help. l l l Ex: Shawn Taylor worked 5 days last week as a temp computer operator. His per diem rate is $120. How much money did Shawn make last week? $120 x 5 = $600. 00 gross pay for the week Look at page 22 # C and #D

1 -4 Other Wage Plans 3. Tip Employees – Some people get paid a tip or gratuity for the service they provide. This is usually a percentage of the bill or it can be a dollar amount per item. Ex: A waiter gets 15% of the bill A skycap gets $1. 00 per bag handled. l Look at page 23 # E and #F

l Look at page 24 and put on your white boards the answers to questions #10 - 13 l 10. 11. 12. 13. l l l $68 $2, 090. 00 $5, 700 $477. 75

1 -5 Finding Average Pay l l Average – a single number used to represent a group of numbers. Simple Average – found by adding several numbers and dividing the sum by the number of items added…. also called the mean. Ex: Monica earned the following for the 3 days she worked…$18, $58, $32. What was her average earnings? $36. 00 Look at page 27 # B and page 28 #C and #D

Grouping Data l l l A number or rate can occur more than once in a set of data. When that happens, you can find the sum quickly by grouping the common numbers. Ex: The Smith Company has 8 employees. Five of the employees earn $9 an hour, two earn $7 an hour, and 1 earns $13 an hour. What is the average amount per our that these employees are paid? 5*$9 = $45. 00 2*$7 = $14. 00 1*$13 = $13. 00 $72. 00 / 8 = $9. 00

Finding an Unknown Item… l l l If one item in a group or set of data is unknown, you may have to find the unknown item. Averages are used often in finding the value of the unknown or missing item. EX: Sue has a 90 average, if 3 of her 4 class grades are 98, 89, 90, what is her 4 th classes grade? 90*4 = 360…. . 360 – 98 -89 -90=83