Chapter 2: Earning an Income

2. Chapter 2: Earning an Income Math 10-3

3. Introduction, Vocabulary, Wages and Salaries • Who has had a job before? • How did you get paid? • Did you get paid overtime? • How did they determine how many hours they worked? • Did they have any deductions? Etc.

4. In Alberta, the current minimum wage is $9.40 per hour. • Minimum wage is the minimum amount a worker MUST be paid an hour, as set out by the Provincial Government. • The minimum wage in BC is $8.75/hour. The minimum wage in Sask. is $9.50. The min. wage in Ontario is $10.25/hour. • why there might be differences in minimum wage across Canada?

5. What is the difference between a salary and a wage? • Salary – paid a fixed amount every pay period. This amount is determined usually in a contract which is signed before employment starts. • Advantages – paid the same amount every pay period, regardless of hours worked/holidays etc. • Disadvantage – not paid for any extra work you might do.

6. Wage – paid a fixed amount PER HOUR worked during a certain pay period. • Advantages – paid for any extra hours you might work. Usually paid more per hour during certain times (for example, working on holidays, Sundays, evenings etc.) • Disadvantages – if you don’t work, you don’t get paid (for example, if you miss a day of work, or you work fewer hours in a week than normal).

7. Gross Pay – the total amount of money earned in a pay period. AKA gross earnings. This is the amount you make BEFORE deductions.

8. A pay statement is a form an employer will give you that shows earnings for a defined pay period. • A pay period could be weekly, bi-weekly, monthly, etc. • *weekly – once a week (paid 52 times per year) • *bi-weekly – every two weeks (paid 26 times/year) • *monthly – once a month (paid 12 times/year) • *semi-monthly – twice a month (paid 24 times/year) • *annually – one year (paid once a year)

9. *How do we determine the monthly, semi-monthly, bi-weekly and weekly pay for a salary?* Ex. Brendan works at the Edmonton Journal. His annual salary is $35 650. • Determine the following scenarios: • If Brendan is paid monthly, how much will he make gross monthly? • 12 pay periods per year: $35 650 / 12 = $2 970.83 / month • Paid Semi-Monthly? • 24 pay periods per year : $35 650 / 24 = $1 485.42 twice a month

10. Paid Bi-Weekly? • 26 pay periods per year: $35 650/26 = $1 371.15 every two weeks • Paid Weekly? • 52 pay period per year: $35 650/52 = $685.58

11. What are the advantages and disadvantages of each pay period?

12. *How do we determine the gross pay for wages? • EX: Morgan makes minimum wage. He works 35 hours one week. How much will his gross pay be for that week? • *Multiply the number of hours worked by the wage to get gross pay!* • 35 hours x $9.40/hour = $329.00 • *Always round MONEY to two decimal places!!!*

13. How often does Christine get paid? Weekly (24-18 = 6 days = 1 week) • If Christine gets paid the same amount every week, how much will she make gross in a month? $231.25 x 4 weeks/month = $925.00 • How much will she make in a year? $925.00 x 12 months/year = $11 100

14. How often does Rob get paid? Bi-Weekly (17 -4 = 13 days = 2 weeks) • If Rob gets paid the same amount every pay period, how much will he make in a month? 2 x 672.05 = $1 344.10 • If Rob gets paid the same amount every month, how much will he make gross per year? 12 x 1 344.10 = $16 129.20

15. Assignment: salaries and wages.doc

16. Day 2: Hours Worked – Completing Time Cards

17. Handout: Alberta.employment.standards

18. Full Time VS Part Time • Full Time – usually considered to be between 35- 44 hours per week. Typically, full time results in 8 hour shifts per day, 5 days a week. • Part Time - usually considered to be less than 35 hours a week. Typically, part time results in shifts less than 8 hours OR fewer days are worked per week. • Shift – the amount of time you work.

19. Getting Paid with a wage – how are the hours you work tracked? • Punch cards – at the start and end of every shift, you insert a card into a machine that will record the date and time. This card is then later used to calculate the number of hours worked during a pay period. • Time Card (Personal) - you may have to manually record the time you start and end each shift. Sometimes this is called “logged hours”. • Time Card (Pay Roll) – you may work for a company where a person logs your hours for you. It will be your responsibility to inform them of any extra hours you work, or any shifts you miss.

20. 24 hour time – most jobs will use 24 hour (instead of 12 hour) time. To determine the time, subtract 12. • Remember, in 12 hour time, the morning is am, and the afternoon/evening is pm • Ex. What time is 13:05? 13-12 = 1:05 pm • What time is 22:45? 22-12 = 10:45 pm • What time is 02:50? = 2:50 am

21. How do we determine the number of hours worked? • For example, you work from 9:30 – 14:50. How many hours have you worked? • 1st add minutes to the start time to match the minutes of the end time • 9:30 + 20 minutes = 9:50 • 2nd subtract the hours: 14 – 9 = 5 hours • 3rd combine hours and minutes = 5 hours + 20 minutes.

22. Employers don’t usually pay for every minute of work. Typically you will get paid for every quarter hour you work. Round to the nearest quarter (0, 15, 30, 45) • 20 minutes – closest to 15 minutes. • What part of an hour is 15 minutes? • x/1 = 15/60 = 0.25 • 4th Add hours and parts of an hour together: 5 + 0.25 = 5.25 hours.

23. Ex: Complete the following time card:

24. If Bill makes $10.25 per hour, how much will he make gross for this pay period? • 20 x 10.25 = $205

25. Day 3: Other ways to Earn – Piecework and Commission

26. Salary and wage aren’t the only ways to earn an income. Other ways include: • Self employment – a person who works for themselves rather than for an employer. • Piecework – when someone is paid a set rate for an amount produced • Commission – an amount (usually a percentage) paid to someone for a business transaction • Contract – a legal agreement that outlines terms, conditions and payments for work to be done

27. Brainstorm as a class examples of occupations for each vocabulary words above. Also, brainstorm advantages and disadvantages of being self employed.

28. Piecework • Ex. Michelle is an Artisan – a craftsperson who specializes in decorative arts. She makes pottery bowls. She sells large bowls for $45.00 and medium bowls for $35.00. One weekend at a farmers market she sells 11 medium and 8 large bowls. How much does she make? • *Multiply price by quantity, then add totals together* $45 x 8 = $360 $35 x 11 = $365 Total: $745

29. CommissionReview: Percent means out of 100! To find the percent of numbers, change the percent to a decimal, and then multiply this decimal by the number in question. • Ex. Lindsay works at a car dealership. She gets 3% commission on all sales. Last month she sold a total of $44 375. How much will her gross earnings be? • 1st change % to a decimal • 3% = 3/100 = 0.03 • 2nd multiply decimal by total sales • 0.03 x 44 375 = $1 331.25

30. Ex. Dan works as a real estate agent. He gets 0.2 % commission on the sale price of any house he sells. Last month he sold 2 houses: $299 450, and $380 200. How much will his gross earnings be? • 1st Add up his sales: • 299 450 + 380 200 = $ 679 650 • 2nd change % to a decimal • 0.2% = 0.2/100 = 0.002 • 3rd multiply decimal by his sales. • 0.002 x 679 650 = $1 359.30

31. Ex. Carl works at The Keg restaurant. He makes $8.80/h plus he gets to keep 75% of his tips. If one week he works 36 hours and makes $155 in tips, what will his gross earnings be? • 1st find out his hourly wage amount • $8.80/h x 36 hours = $316.80 • 2nd change % to a decimal, and multiply by his tips • 75% = 75/100 = 0.75 0.75 x 155 = $116.25 • 3rd add his wage and tips together to get total • $316.80 + $116.25 = $433.05

32. Ex. Andrew starts a new job selling Apple Computers. The company offers him the following pay options: • Base salary of $500 plus 2% of all sales • Straight commission of 6% • Determine Andrew’s gross earnings for both options based on the following sales:

33. When is option 1 a better choice? • When is option 2 a better choice? • Which would you choose?

34. Day 4:Extra Pay: Overtime, Vacation, Bonus

35. Handout Alberta.standards.overtime to students.

36. Overtime income can be calculated easily. • 1st Determine the number of over time hours worked • 2nd multiply this by the overtime rate (time-and-a-half = x 1.5, double time = x 2) and current wage. • 3rd add overtime to regular work hours.

37. Ex. Rebecca in one week works 40 hours, plus 8 hours over time. She makes $9.25/hr plus time and a half for overtime. How much will she make gross? • Regular Pay: 40 x 9.25/hr = $370 • Overtime Pay: 8 x 1.5 x 9.25 = $111 • Total Gross: 370 + 111 = $481

38. If you have a service industry job (retail, restaurant, fast food, etc.) you will likely have to work on holidays. See handout for more info. You will likely get paid at least time-and-a-half for all hours worked on a holiday.

39. Ex. Trent works at Safeway. On Thanksgiving Monday he works 5 hours, Tuesday 8 hours, Thursday 6 hours and Friday 4 hours. If Trent makes $8.95/h regular, how much will his gross pay be for the week? • Regular: 8 + 6 + 4 = 18 hours x 8.95/hr = $161.10 • Holiday Monday = 5 hours x 1.5 x 8.95/hr = $67.13 • Gross Pay: 161.10 + 67.13 = $228.23

40. Some service industry jobs will give you “vacation pay” instead of paid vacation time; this will likely be a percentage of your yearly gross pay that will work out to be the same as two weeks of pay. This will be either paid out to you in a lump sum annually or on every pay check. If you take time off, you will not be paid while you are away.

41. Ex. Sarah gets vacation pay as 4% of her gross income paid annually in January. If she makes $10.50/hr for a 35 hour work week, how much will she make vacation pay? • 1st determine her weekly gross pay: • 10.50/hr x 35 = $367.50 • 2nd determine her annual gross pay • $367.50 x 52 weeks/year = $19 110 • 3rd find her vacation pay *remember to change the % to a decimal! • 4% = 4/100 = 0.04 • 0.04 x 19 110 = $764.40 • If Sarah gets her vacation pay every pay period, how much will this be? • 764.40 / 52 weeks/year = $14.70 per weekly pay period

42. Assignment: overtime and holidaypay.doc

43. Day 5: Deductions- Union Dues, Health Plans, Charitable Deductions etc.

44. Gross Income/Pay – income earned before deductions • Net Income/Pay – Income received after deductions (your “take home” pay) • Before taxes are calculated on gross pay, there are certain “before-tax” or “tax exempt” deductions. • These include: • Union dues, RRSP (registered retirement savings plan), charitable donations and pension

45. Ex. Lilly works as a receptionist. She makes $650 a week. Her union dues are $14.10 per pay check. What percent of Lilly’s gross pay does she pay in union dues? • 1st determine here gross annual income: $650 / week x 52 weeks = $33 800 • 2nd determine her annual union dues $14.10 / week x 52 weeks = $733.20 • 3rd determine the % of her annual gross income that she pays for union dues: • *remember, percent is part of a whole* • $733.20/$33 800 = 0.0216… • 0.0216… x 100 = 2.2% of her gross income is spent on union dues.

46. In addition to these deductions, many people pay amounts from their gross pay for a wide range of benefits and programs such as dental plans and savings plans. • Many employers also offer lifestyle benefits. Such as discounts on merchandise, services, or bonus items like movie tickets etc.

47. Marmot Basin example

48. Ex. You have a 16-week contract at Marmot Basin in Jasper, where you will be working between 15 hours a week. Your employer offers you a choice of • $10.75/hr or • $8.80/hr plus a weekday season pass that has a value of $680.

49. How many hours total will you work during the 16-week contract? • 16 week x 15 hours /week = 240 hours • How much will you make for the first choice? • $10.75/hr x 240 hrs = $2 580

50. How much will you make for the second choice? • $8.80/hr x 240 hrs = $2 112 PLUS a $680 season pass. • Which would you choose? Why?