Chapter 1 Gross Pay 1-1 Hourly Pay 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 McDonald’s makes $7.35 and hour for every hour they work. To figure hourly pay Gross Pay – the total amount of money that an employee is paid…this is also called total earnings. Multiply # of hours worked by $ pay per hour Joe earns $8.90 per hour and works 26 hours this week, his gross pay is 8.90 x 26 = $231.40 Sue earns $14.60 per hour and works 22 ½ hours this week, her gross pay is $14.60 x 22.5 = $328.50 Recording Hours Worked… 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? (Getting extra pay for extra work) There are two methods to calculate overtime: 1. 2. Any hours worked more than 40 hours a week. Any hours over a stated amount of hours per day. Most people are paid time and ½ for every overtime hour worked. To calculate overtime pay: – – Pay per hour x 1.5 x number of overtime hours. Then add overtime pay to regular pay. To calculate gross pay with overtime hours: 1. 2. 3. 4. 5. 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… 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… $ 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? Overtime is calculated based on hours worked in 2 ways… 1. 2. Hours worked over 40 hours a week. Hours worked over a stated amount (usually 8) a day. a) This is paid EVEN if the total hours worked in a week is less than 40…it is based on a daily number of hours worked. Example on #2 option Karen gets paid $12.40 and hour plus time and ½ for any hours worked more than 8 a day. Last week she worked the following: M – 6, T – 12, W – 8, TH – 8, F – 10 What was her gross pay? Reg Hours = 38 Reg Pay = 38 x $12.40 = $471.20 OT Hours = 6 OT Pay =6 x 1.5 x $12.40 = $111.60 Gross Pay = $471.20 + $111.60 = $582.80 1. 1-2 Salaried Employees 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 Salary – When people get paid a stated amount per year and this is paid in equal amounts per paycheck. Negatives: Doesn’t matter how many hours you work per week Positives: Security of getting a good paycheck. 9-18-13 Please get out the following: Textbook Homework..pg 2 Whiteboard Expo marker Rag for board Notebook, calculator, pen/pencil Be Ready…. There will be a quiz tomorrow on what we have learned so far this year. 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. This is usually paid to salespeople as an incentive to sell more. 1. Straight Commission 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. To Calculate = %Rate of commission x quantity sold = $commission pay Straight Commission Examples… EX. Earl Brown sells greeting cards and is paid a straight 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 Straight Commission Examples…(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. 2. Commission based on a quota 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 $2,900.00 x .05 = $ 145 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? Salary plus commission…. 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 $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 3. Graduated Commission 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.. Graduated 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? 3% on first $3,000 5% on second $2,000 7% on anything over $5,000 Homework… Page 5 #7 and 8 only- will be graded tomorrow. 2-2 Finding Gross Pay 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 Please get out… Calculator Pen/Pencil Notebook w/dividers in it and paper Textbook Workbook White board, marker and rag 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. Ex: Tom makes $70 for each bike he makes, if he makes 40 bikes, he makes $2,800.00, but what if 2 of the bikes were defective? 40-2 = 38 38 * $70 = $2,660.00 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. 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. Look at page 23 # E and #F Look at page 24 and put on your white boards the answers to questions #10 - 13 10. 11. 12. 13. $68 $2,090.00 $5,700 $477.75 1-5 Finding Average Pay 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 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… 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 4th classes grade? 90*4 = 360…..360 – 98-89-90=83 What is a Percent or Percentage? 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. 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.