2. A Budget: is a financial plan that shows
expected income and expenditure over a
certain time period.
Why budget?......
Ms O' Brien Chanel College
3. 1. To ensure money is available to
cover costs
2. Reduce risk of impulse buying
3. Avoid build up of debt
4. Money for a ‘rainy day’
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4. Income:
- is money or a benefit in kind you
receive
- 1. Regular
2. Irregular (additional)
3. Benefit-in-Kind
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5. 1. Regular Income:
- Is what you are sure of receiving
- You can plan to spend it
- E.G. Wages/ Salary/Child Benefit
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6. 2. Irregular Income:
- Is what you are not sure of receiving
- You cannot plan to spend it
- E.G. Bonus / Lotto Win
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7. 3. Benefit- in –Kind:
- Non money income received for work
done
- Incentive to work hard
- Boosts employee morale
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8. Place Incomes under correct headings
Regular Benefit in Kind Irregular
Wages Overtime Interest Medical Insurance Pension
Salary Lotto win Gift Car Social Welfare Benefit Mobile
Bonus Commission Tax refund Club Membership
Ms O' Brien Chanel College
9. Wages
•Is regular income for hours worked or
number of goods produced.
•E.g. Builder
Salary
•Is regular income received for doing a job
no matter how many hours you spend at it.
•E.g. Teacher
* Min wage €6.06
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10. Types of Employee Income
1. Time Rate:
Getting paid per hours worked.
2. Piece Rate:
Getting paid per number of
products produced.
Which would you prefer?....
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11. 3. Commission
•Additional income calculated as a
percentage of sales.
•Eg.
•Mary earns 5% commission on every
euro worth of clothes she sells.
•How much does she earn for selling
200 euro worth?
Ms O' Brien Chanel College
12. • 200 X 5
100
= €10
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13. 4. Basic wage
- Regular weekly payment for normal
hours worked.
-Eg. €10 x 30 hrs = €300
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14. 5. Overtime
• Additional payment for working over
your normal hours.
Eg.
• Time and a half. €10 + 1/2 = €15
per/hr
• Double time. €10 x 2 = €20 per/hr
• Treble time. €10 x 3 = €30 per/hr
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15. Example
• Mary receives €20/hr for a normal
30 hour week and double time for
overtime.
• How much does she earn for a 32
hour week?
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16. Answer
• Basic Pay= 30 x € 20 = €600
• Overtime = 2 x (€20 x 2) = € 80
• Total €680
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18. Net Wage
(Take Home Pay)
Basic pay + overtime after deductions
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19. Deductions:
Voluntary (Choice) Involuntary (Compulsory)
Pension PAYE
Medical Insurance PRSI
Savings Universal Social
Contribution
Trade Union Fees
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20. Statutory Deductions:
•PAYE – Pay as you Earn
-32800@20%
- Anything over @ 41%
- Used by government to
invest in services e.g. Health Care
Ms O' Brien Chanel College
21. PRSI: Pay Related Social
Insurance
-Collected as a contribution by the
employee towards social welfare
benefits
-E.G Old age Pension,
Unemployment benefit
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22. Wage slip
Basic hourly wage: is what you get for every hour worked
Overtime: is what you receive for any extra hours you work
Basic
Basic hourly wage €10 Per Hour
No of hours worked 6 Hours
Total wages received
Over time
Basic wage plus time and a
half
No of hours worked 3 Hours
Total Overtime wages
received
Gross wage
Ms O' Brien Chanel College
23. Solution
Basic
Basic hourly wage €10 Per Hour
No of hours worked 6 Hours
Total wages received 10 x 6 = €60
Over time
Basic wage plus time and a 10/2 = 5
half 10+5 = €15 Per Hour
No of hours worked 3 Hours
Total Overtime wages 15 x 3 = €45
received
Gross wage €60 + €45 = €105
24. Workbook pg 2 Q10
Jan Feb Mar April May June Total
Joe 2300 2300 2600 2550 2300 2300
Mary 2800 2800 2800 3600 2800 2800
Child 240 240 240 240 240 240
Ben
Inter - - - - - 560
est
Total
Incom
e
Ms O' Brien Chanel College
25. Expenditure
Fixed: Spending money on goods and services
regularly. Amount does not vary.
Irregular: Spending money on goods and services
regularly But the amount spent varies.
Discretionary: Spending money on things we want
but do not need
26. Expenditure
Fixed Irregular Discretionary
Rent Car running costs Presents
Mortgage Phone bills Holiday
Insurance Groceries Entertainment
Clothes Magazine
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27. Current Expenditure: Spending money
on day-to-day items
Capital Expenditure: Spending money
on durable items for long term usage
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28. Opportunity Cost
The item we do without when we have
to make a choice between two or
more actions
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29. Opportunity Cost
You have €50 to spend .
You can buy a ticket to go and see a
or you can buy 5 video games.
What is your decision?
30. Impulse Buying
“Buying without thinking”
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31. False Economy
Buying something because it is
cheap but in the long run costs you
more
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32. False Economy
She only cost
a euro dad
and she is
going to have
puppies!
33. Reading Electricity Bills
Present 6734
Previous 5890
No of units used 844
Rate per unit .20
Sub total 168.80
Standing charge 10.00
Total charge Ms O' Brien Chanel College 178.80
34. E.G. Question ESB Meter Reading
Present 6534
Previous -4850
No of units used
Rate per unit X.30
Sub total
Add Standing charge +15.00
Total charge
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35. Present 3436
Previous 2916
No of units used
Rate per unit .15
Sub total
Add Standing charge 16.20
Subtotal
Vat @13.5%
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36. Example 3. Electricity Bill
Present Previous Quantity Description of charges Total
and Price Amounts
3436 2916 X @ €0.15 General Units €
60 days @ Standing Charge €15.00
€0.25
Subtotal €
Vat @ 13.5% €
Total €
Billing Period Pay by Total now due
14 Jul 11- 18 18 Oct 11 €
Sept 11
Ms O' Brien Chanel College
37. Present Previous Quantity Description of charges Total
and Price Amounts
10350 9240 X@ General Units
€0.02
Standing Charge €20.00
Public Levy €0.00
Vat @ 10%
Billing Period Pay by Total now due
14 Aug 11- 18 12 Nov 11
Oct 11
Ms O' Brien Chanel College
