Lesson 37 Making Money Text: Chapter 1, section 5$ In order to make money you have to have some type of employment. Once you have the job there are a few ways you can be paid:$ Commission – the amount paid is based on a percentage of sales. There are FOUR different types of commission. Option 1: Straight Commission – you do not receive an hourly wage or salary. The money you make is based purely on how much you sell. Option 2: Salary PLUS commission – You earn a salary or hourly wage plus you make a percent of your sales. Option 3: Graduated Commission – You are paid only commission but your commission rate increases at various levels of sales. Option 4: Salary PLUS commission WITH a quota – You are paid commission on sales only after selling a specified amount of the company’s product.$ Hourly Wage – you are paid based on the number of hours worked not on how much you sell.$ Salary – Paid a yearly salary, which is divided evenly into pay periods. It doesn’t matter how many hours you work.$ Piecework – amount given for each piece of product produced.$ Fee for Service – money given for a service provided (i.e.: A Lecture)$ Contract – money given upon completion of a certain project.$ Tips and Gratuities – money given based on a particular percentage of a bill (10% - 15%) given to workers of the service industry (i.e. – waitress).$ Self Employment – Individuals who work for themselves and are not employed by another.
Other Important Terms $ Gross Income – The money an employee earns before deductions. Mandatory deductions are Employment Insurance (EI), Canada Pension Plan (CPP) and Federal and Provincial Income Tax. $ Net Income – Money an employee receives after deductions. It is some times called an employee’s “Take-home pay.” $ Pay Period – Intervals between pay cheques. Biweekly (every two weeks) or semi-monthly (twice a month) are common pay periods. $ Overtime – an amount paid for work beyond a normal work week or a normal work day. It is usually paid at a rate of “time and a half” (x 1.5), although some holidays are paid “double time” (x 2) or “double time and a half (x 2.5).Example:Kelly works full time at a gas station. She is paid $7.50 per hour plus time and a half forovertime. Overtime is considered to be any time worked beyond a 40 hour work week.One week she worked 46 hours. Calculate her gross pay.Example:Lenny works for WinPack and is paid $12.50 per hour. He is paid overtime for anyhours over 8 hours per day. This is his schedule from last week; calculate his gross pay.Monday – 8hTuesday – 7.5 hWednesday – 10 hThursday – 8 hFriday – 9h