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Mastering Gross Pay Calculations: Salary, Hourly, Piecework & Commission

Learn to calculate gross pay for different pay periods and wages, understand terms like salary, overtime, piecework, and commission. Step-by-step examples provided for practical understanding.

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Mastering Gross Pay Calculations: Salary, Hourly, Piecework & Commission

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  1. Eagle Challenge Identify the steps of Selling. Learning Target

  2. Gross Pay • Find the gross pay per paycheck based on salary. • Find the gross pay per weekly paycheck based on hourly wage. • Find the gross pay per paycheck based on piecework wage. • Find the gross pay per paycheck based on commission.

  3. Find the gross pay per paycheck based on salary Pay periods • Weekly: once a week or 52 times a year. • Biweekly: every two weeks or 26 times a year. • Semimonthly: twice a month or 24 times a year. • Monthly: once a month or 12 times a year.

  4. Find the gross earnings per pay period. • Ruth earns $36,000 a year. If she is paid on a weekly basis, what is her gross pay per week? • Divide $36,000 by 52 pay periods. • $692.31 • What if she is paid on a semimonthly basis? • $1,500.00

  5. Try these examples. Find the gross earnings for: • Carolyn, who earns $15,000 a year and is paid weekly. • $288.46 • Martha, who earns $48,000 a year and is paid biweekly. • $1,846.15 • Bill, who earns $35,000 a year and is paid semimonthly. • $1,458.33

  6. Key Terms • Gross earnings (gross pay): the amount earned before deductions. • Net earnings (net pay/take-home pay): the amount of your paycheck.

  7. Key Terms • Hourly rate or hourly wage: the amount of pay per hour worked based on a standard 40 hour work week. • Overtime rate: rate of pay for hours worked that exceed 40 hours per week. • Time and a half: standard overtime rate that is 1½ (or 1.5) times an hourly rate.

  8. Key Terms • Regular pay: earnings based on an hourly rate of pay. • Overtime pay: earnings based on overtime rate of pay.

  9. Find the gross pay per week based on hourly wages. • Find the regular pay by multiplying the number of hours (40 or less) by the hourly wage. • Find the overtime pay by multiplying the hourly rate by the overtime rate (usually 1.5) and then multiply that rate by the number of hours that exceed 40. • Add the figures from steps 1 and 2.

  10. Here’s an example. • Theresa worked 45 hours last week. If her hourly rate is $10.50 per hour, find her total gross earnings. • Multiply 40 x $10.50 = $420.00 • To calculate the overtime amount, multiply her hourly rate by 1.5: $10.50 x 1.5 = $15.75. • Multiply the overtime rate ($15.75) x the number of overtime hours (5): $15.75 x 5 = $78.75. • Add the regular and overtime pay: $498.75

  11. Try these examples. • The regular hourly rate in the production department for these employees is $6.50. • Overtime is paid at 1.5 • Find the weekly earnings for these employees: • Marcus worked 48 hours. • $338 • Allison worked 44 hours. • $299

  12. .3 Find the gross pay per paycheck based on piecework. • Piecework rate: amount of pay for each acceptable item produced. • Straight piecework rate: piecework rate where the pay per piece is the same no matter how many items are produced. • Differential piece rate (escalating piece rate): piecework rate that increases as more items are produced.

  13. Here’s an example • Jorge assembles microchip boards. He is paid on a differential piecework basis. • Rates are as follows: • From 1-100 $1.32 per board • From 101-300 $1.42 per board • 301 and over $1.58 per board • If he assembles 317 boards how much will he earn?

  14. Jorge’s earnings • 100 x $1.32 = $132.00 • 101-300 x $1.42= $284.00 • 17 x $1.58 = $ 26.86 • Total earnings: $442.86

  15. Find the gross pay per paycheck based on commission • Commission: earnings based on sales. • Straight commission: entire pay based on sales. • Salary plus commission: a set amount of pay plus an additional amount based on sales. • Commission rate: percent of sales that are eligible for a commission. • Quota: a minimum amount of sales that is required before a commission is applicable.

  16. Here’s an example. Shirley Garcia is a restaurant supplies salesperson and receives 5% of her total sales as commission. Her sales totaled $15,000 during a given week. Find her gross earnings. • P = 0.05 x $15,000 = $750. • Shirley’s earnings equal $750.

  17. Try this example. • Melanie Brooks works for a cosmetics company and earns $200 a week in salary plus 30% commission on all sales over $500. If she had sales of $1,250 last week, how much were her total earnings? • Her salary would be $200 plus any applicable commission. • The commission would be calculated at 30% on $750 in sales or $225. Add this amount to her base salary and the total is $425.

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