Personal Finance: Module 1 Lesson 3 Essentials for the Journey

1. Personal Finance: Module 1 Lesson 3 Essentials for the Journey

2. Determining Your Destiny • Slide 2 What is employee compensation? It’s the total amount of pay provided to an employee in exchange for services performed. Employees can be paid in two ways: • Direct (monetary) • Indirect (non-monetary) Video:Understanding Employee Compensation

3. Determining Your Destiny • Slide 3 Types of Monetary Compensation • Salary • Wages • Overtime • Commission • Tips • Bonuses • Profit

4. Determining Your Destiny • Slide 4 Salary, Wages and Overtime • Salary– a fixed amount paid each pay period no matter how many hours were actually worked • Wages – usually received as an hourly, daily or weekly rate of pay; fluctuates based on the actual amount of time the employee worked during the pay period • Overtime– pay for hours worked over 40 hours in a week usually paid at a rate of one and one-half times the employee’s regular rate of pay

5. Determining Your Destiny • Slide 5 Commission, Tips and Bonuses • Commission– a common way to motivate and pay sales people. Usually a percentage of the total price of the product or services sold during a pay period • Tips– an extra amount a customer pays to reward service workers for providing quality service • Bonuses - an amount employer paysin addition to regular pay to reward good performance (by the employee, company, or both)

6. Determining Your Destiny • Slide 6 Profit from Self-employment & Entrepreneurship A person works for him- or herselfand owns the business or enterprise • Self-employment income is called profit. • Profit is the money left over after all business expenses are paid.

7. Determining Your Destiny • Slide 7 Indirect or non-monetary compensation provided to employees (by their employer) in addition to wages, salary and tips “ Employee Benefits ” College Grad Evaluating Your Benefits Package

8. Determining Your Destiny • Slide 8 Basic Types of Employee Benefits • Paid leave • Group insurance • Retirement plans • Educational assistance program • Profit-sharing and stock options

9. Determining Your Destiny • Slide 9 Types of Paid Leave • Holiday pay – employee is paid for certain holidays even when the place of employment is closed • Sick leave – worker is paid even though he or she is not at work due to illness • Personal/annual leave– worker is paid even though he or she is not at work because of personal reasons (not due to illness)

10. Determining Your Destiny • Slide 10 Group Insurance • Group Health Insurance– employer-sponsored insurance that helps provide protection against the costs of medical services (and may include dental and visionoptions) at a reduced cost to employee. • Flexible Spending Accounts (FSA) – employee has money deducted from paycheck to be set aside to pay future healthcare expenses that are not covered by insurance. Employment Benefits Flexible Spending Accounts

11. Determining Your Destiny • Slide 11 Group Insurance • Group life insurance provides benefits to dependents and/or others you name in the case of your death • Group disability insurance replaces lost income if you are unable to work • Short-term group disability replaces a portion of income for up to six months • Long-term group disability replaces a portion of income for longer than six months

12. Determining Your Destiny • Slide 12 Comparing Employee Benefits Worksheets Health Insurance Cost Compare Employee Benefits Links and Activities Benefits Wizard

13. Determining Your Destiny • Slide 13 Retirement Plans Employer-sponsored plans that help employees be better prepared for a time when they are retired and no longer working. • 401(k) Plans– employee chooses how much money to deduct from each paycheck and how to invest it--many employers will offer to match a portion of the employee’s contribution! Begin Providing for Your Future • Pension Plans – retirement accounts funded entirely by the employer. Value varies depending on years worked, salary, etc. What is a pension?

14. Determining Your Destiny • Slide 14 Educational Assistance Program An employee benefit wherein some or all educational expenses are funded by the employer • Policies are set by employer • May extend to family members College access tip! Having all or part of your education paid for by an employer is a very valuable employee benefit!

15. Determining Your Destiny • Slide 15 Profit-Sharing and Stock Options Profit-sharing – employees are paid a share of the company’s profit Stock options – employees receive shares of stock in the company at a fixed price

16. Determining Your Destiny • Slide 16 “ Step with care and great tact and remember that Life’s a Great Balancing Act. ” Oh, the Places You’ll Go! by Dr. Seuss

17. Determining Your Destiny • Slide 17 Work-life Balance • We all deserve to be able to balance our careers with rewarding personal lives! • Employees who feel they have a better work-life balance tend to work 21% harder. • Find out as much as you can before deciding if a career opportunity is right for you… • Flexible work schedule • On-call or overtime • Overnight travel • Family emergencies • Commute time Health & Balance Five Tips for Better Work-Life Balance

18. Determining Your Destiny • Slide 18 Financial Education for College Access and Success For this project, the PR/Award Number is V215W100015 and the Department of Education is the funding agency. This information is provided for the reader's convenience. Tennessee and U.S. Department of Education are not responsible for controlling or guaranteeing the accuracy, relevance, timeliness, or completeness of this information. Further, the inclusion of information or Web site address does not reflect the importance of the organization, nor is it intended to endorse any views expressed, or products or services offered.