General- Financial Maths notes

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Salaries and wages

Salaries are a fixed annual amount, paid fortnightly or monthly.

A wage is based on the fixed rater per hour. Hours outside of the work period are paid at a higher rate.

Special Rates

Wage-earners who work extra hours are ‘working overtime’

Overtime- the time in which a worker is working over their regular hours of employment.

When an employee works overtime a higher rate is paid, also known as a penalty rate

1 ½ time the normal pay rate or double time (paid double amount of normal rate of pay)

Also paid when working at unfavourable times such as:

Weekends

Public holidays

Night

To calculate the hourly rate earned when working overtime, multiply the normal hourly rate by the overtime factor.

1 ½ for overtime, 2 for double time and 2 ½ for double time and a half.

Timesheets and payslips

Employers often use records called timesheets to monitor the number of hours worked by each employee.

Details of the hours worked and the rate of pay is given to each employee on a payslip, which they receive with their wages

Piecework

Piecework- a system of payment in which a worker is paid a fixed amount for each job or task they complete.

A person may also be paid on a sliding scale where the pay rate increases as the number of completed tasks increases

In some cases, piecework is paid for multiple rather than single units. E.g you may be paid per 100 deliveries made.

Commission and royalties

Commission- a method of payment in which payment is calculated as a percentage of the value of goods sold.

Commission is mainly used for salespeople

Royalty- a payment made to a person who owns the copyright. They are also calculated as a percentage of sales

Royalties are used in music, the artist or musician who wrote a piece of music is paid a royalty on CD and online sales.

Sometimes a salesperson is paid a small wage called a retainer, plus a percentage of the valueof the goods sold.

Loadings and bonuses

If a wage or salary earner has to work in difficutor hazardous conditions, they are granted an extra payment

Loading- a payment added to a wage or salary, normally as a base percentage of the base wage or salary.

Holiday loading is also granted for a 4-week period each year the are 17.5% of their usual wage

Many people employed in managerial positions receive a bonus if the company achieves certain performance targets.

Bonus may be a percentage of their annual salary or the company’s profits.