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Gross Earnings Calculation Methods and Examples

Learn about different methods for calculating gross earnings, including piecework, commissions, overtime, and more. Examples provided.

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Gross Earnings Calculation Methods and Examples

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  1. Section 6.2 Gross Earnings: Piecework and Commissions

  2. Piecework • Piecework Rate: pays an employee a given amount per item produced. (no regard to time) • Gross Earnings = pay per item x number of items • EX: A production worker is paid $0.58 for assembling a lamp, $1.23 for a ceiling fan, and $0.86 for a box fan. One week, a worker assembled 220 lamps, 318 ceiling fans, and 174 box fans. Find the worker’s gross earnings.

  3. Gross Earnings for Differential Piecework • The pay per item is dependent of the number of items produced. (The pay increases with # produced as an incentive.) • EX: Scooter Frame Co. pays welders as shown. Find the gross earnings of a welder who welds 282 frames.

  4. Gross Pay for Piecework with a guaranteed hourly wage • The worker can earn an hourly wage or piecework pay, whichever is more. • EX: A cabinet door finisher is paid $14.70 per hour for an 8-hour day, or $0.95 per cabinet door finished, whichever is higher. Find the gross earnings:

  5. Overtime Earnings for Piecework • Time and a half is paid on the piecework rate for Overtime! • Ex: An assembler is paid $0.84 for each child car seat assembled. During a recent week, she assembled 400 seats on regular time and 138 car seats during OT hours. If time and a half is paid for each OT assembly, find the gross earnings per week.

  6. Gross Earnings for Commission • Gross Earnings = Commission Rate (%) x Sales • Note: any returns and allowances must be deducted from sales before you multiply! • Ex: An Avon salesperson had sales of $45,350 one month, with returns and allowances of $432. If the commission rate is 18%, find the gross earnings.

  7. Variable commission rate • Sliding scale is designed to be an incentive to get more sales. • Find the correct rate based on sales, then multiply. • EX: Timmy sells office copiers to businesses and is paid a variable commission rate. Find the gross pay if sales are $38,400.

  8. Salary plus Commission • Blends commission with guaranteed pay. • Gross pay = fixed amount per pay period + commission EX: Sanford is paid a salary of $290 a week, plus a 4% commission on all sales over $750. Find his gross earnings for a week in which his total sales were $1870.

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