Understanding Pay, Benefits, And Incentives Show


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Understanding Pay, Benefits, And Incentives Show

  1. 1. Understanding Pay,Understanding Pay, Benefits, and IncentivesBenefits, and Incentives
  2. 2.  Gross Pay – total pay before anyGross Pay – total pay before any deductionsdeductions  YTD – year to dateYTD – year to date  Hourly Wages and OvertimeHourly Wages and Overtime • Standard workweek is 40 hours in a 5-dayStandard workweek is 40 hours in a 5-day period of 8 hours each dayperiod of 8 hours each day • According to Fair Labor Standards Act, hourlyAccording to Fair Labor Standards Act, hourly workers must receive overtime at the rate ofworkers must receive overtime at the rate of 11/2 times the regular rate of pay11/2 times the regular rate of pay  Some businesses are exempt from this requirement.Some businesses are exempt from this requirement. www.dol.gov/esa/regs/compliance/whd/hrg.htmwww.dol.gov/esa/regs/compliance/whd/hrg.htm
  3. 3. Salary:Salary:  If you work for salary, you generallyIf you work for salary, you generally work regular hours but you will NOTwork regular hours but you will NOT receive additional pay for overtimereceive additional pay for overtime workwork  Salary is stated as an annual (yearly)Salary is stated as an annual (yearly) amount.amount.
  4. 4. DeductionsDeductions Deductions are amounts subtractedDeductions are amounts subtracted from your gross pay.from your gross pay. Required deductions:Required deductions: - Social Security (FICA) and MedicareSocial Security (FICA) and Medicare - Federal Income TaxFederal Income Tax - State Income TaxState Income Tax
  5. 5. Optional deductions:Optional deductions:  Credit union paymentCredit union payment  Health insuranceHealth insurance  Dental insuranceDental insurance  Union duesUnion dues  Accidental deathAccidental death  Life insuranceLife insurance
  6. 6. Regular Wages + Overtime = Gross Pay or Salary = Gross Pay Gross Pay – Deductions = Net Pay
  7. 7. Benefits & IncentivesBenefits & Incentives Benefits are forms of employeeBenefits are forms of employee compensation in addition to pay.compensation in addition to pay. Ex. Insurance, retirement savingsEx. Insurance, retirement savings plans, paid sick leave, vacations,plans, paid sick leave, vacations, profit sharingprofit sharing
  8. 8. Profit SharingProfit Sharing – plan that allows– plan that allows employees to receive a portion of theemployees to receive a portion of the company’s profits at the end of thecompany’s profits at the end of the corporate year.corporate year. Incentive pay – money offered toIncentive pay – money offered to encourage employees to strive forencourage employees to strive for higher levels of performancehigher levels of performance
  9. 9. Paid Vacations and HolidaysPaid Vacations and Holidays Most business provide full-time employeesMost business provide full-time employees with a set amount of paid vacation time.with a set amount of paid vacation time. Businesses also provide full-time employeesBusinesses also provide full-time employees with paid time off for holidays.with paid time off for holidays. Ex. Christmas, Thanksgiving, Fourth of July,Ex. Christmas, Thanksgiving, Fourth of July, Labor Day, and Memorial Day.Labor Day, and Memorial Day. Employees required to work may receive paidEmployees required to work may receive paid time and a half or double time.time and a half or double time.
  10. 10. Employee ServicesEmployee Services are extras thatare extras that companies offer in order to improvecompanies offer in order to improve employee morale and workingemployee morale and working conditions.conditions. Ex. Employee discounts, tuitionEx. Employee discounts, tuition reimbursement for college courses,reimbursement for college courses, day-care centers, counseling forday-care centers, counseling for employees, etc.employees, etc.
  11. 11. Child CareChild Care – Many companies provide– Many companies provide on-site child-care facilities as well ason-site child-care facilities as well as coverage of child-care expenses.coverage of child-care expenses. Sick PaySick Pay – Many businesses provide– Many businesses provide an allowance of days each year foran allowance of days each year for illness, with pay as usual.illness, with pay as usual. Customary to receive 3-10 days aCustomary to receive 3-10 days a year as “sick days” withoutyear as “sick days” without deductions from pay.deductions from pay.
  12. 12. Leaves of AbsencesLeaves of Absences – Allows– Allows employees to leave their jobsemployees to leave their jobs (without pay) for certain reasons.(without pay) for certain reasons. This gives job security and your jobThis gives job security and your job is protected.is protected.
  13. 13. InsuranceInsurance Most large companies provide groupMost large companies provide group insurance plans for full-timeinsurance plans for full-time employees. Some companies pay allemployees. Some companies pay all premiums, others pay a portion.premiums, others pay a portion. Employees may elect to have spouseEmployees may elect to have spouse and dependents covered at theirand dependents covered at their expense.expense.
  14. 14. Types of InsuranceTypes of Insurance  Health InsuranceHealth Insurance – typical plan has an– typical plan has an employee paid amount or deductible.employee paid amount or deductible. After deductible has been reached, planAfter deductible has been reached, plan pays 80% of most doctor bills,pays 80% of most doctor bills, prescriptions, and hospitalization chargesprescriptions, and hospitalization charges and emergency bills. After a certainand emergency bills. After a certain amount is reached, insurance pays 100%.amount is reached, insurance pays 100%.  Alternative is HMO (health maintenanceAlternative is HMO (health maintenance organization)organization)
  15. 15.  Life InsuranceLife Insurance – Life insurance– Life insurance pays a cash benefit to a designatedpays a cash benefit to a designated person, beneficiary, when theperson, beneficiary, when the insured dies.insured dies.  Dental InsuranceDental Insurance – Most dental– Most dental plans provide a maximum benefit perplans provide a maximum benefit per year per family member. Preventiveyear per family member. Preventive is usually covered 100%, otheris usually covered 100%, other services generally 80% afterservices generally 80% after deductible.deductible.  Vision InsuranceVision Insurance – Covers cost of– Covers cost of prescription lenses and eyeprescription lenses and eye examinationsexaminations
  16. 16. Bonuses and Stock OptionsBonuses and Stock Options  Bonuses are incentive pay based onBonuses are incentive pay based on quality of work done, years ofquality of work done, years of service, or company sales or profits.service, or company sales or profits.  Stock-purchase options giveStock-purchase options give employees (usually executives) theemployees (usually executives) the right to buy a set number of sharesright to buy a set number of shares of the company’s stock at a fixedof the company’s stock at a fixed price by a certain time.price by a certain time.
  17. 17. Pension and Savings PlansPension and Savings Plans Some employers provide pension plans forSome employers provide pension plans for retirement. Plans are usually funded byretirement. Plans are usually funded by the employer. Employees arethe employer. Employees are vestedvested (entitled to the full retirement account)(entitled to the full retirement account) after a specified period of time.after a specified period of time. Cafeteria-style employee benefit programsCafeteria-style employee benefit programs allow workers to base their job benefits onallow workers to base their job benefits on personal needs.personal needs.
  18. 18. Flexible Work ArrangementsFlexible Work Arrangements FlextimeFlextime (flexible schedules) allows(flexible schedules) allows employees to choose their working hoursemployees to choose their working hours within defined limits. Must be presentedwithin defined limits. Must be presented during specified core time period.during specified core time period. Employees can then choose rest of theEmployees can then choose rest of the working hours.working hours. Compressed workweekCompressed workweek – work scheduled– work scheduled that fits the normal 40-hour week into lessthat fits the normal 40-hour week into less than five days.than five days. Ex: Four 10-hours days followed by three daysEx: Four 10-hours days followed by three days off.off.
  19. 19. Job rotationJob rotation – a job design in which– a job design in which employees are trained to do more thanemployees are trained to do more than one specialized task. Employees rotateone specialized task. Employees rotate from one task to another. This reducesfrom one task to another. This reduces boredom and burnout.boredom and burnout. Job sharingJob sharing – a job design in which two– a job design in which two people share one full-time position.people share one full-time position. Employees split salary and benefitsEmployees split salary and benefits according to the amount of eachaccording to the amount of each employee’s contributions.employee’s contributions.
  20. 20. Permanent Part-TimePermanent Part-Time – employees– employees who choose to work only part-timewho choose to work only part-time (16-25 hours per week).(16-25 hours per week). TelecommutingTelecommuting – employees can– employees can work at home or on the road andwork at home or on the road and stay in contact with their manager orstay in contact with their manager or co-workers through e-mails, fax, andco-workers through e-mails, fax, and mobile phone.mobile phone. Examples: data entry, web design,Examples: data entry, web design, information processing, softwareinformation processing, software development.development.
  21. 21. TheThe EndEnd