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Understanding Gross Pay: Hourly and Salary Structures in Employee Compensation

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This chapter delves into the concepts of gross pay, distinguishing between hourly and salaried employees. It explains how to calculate gross pay based on hourly rates and salaries, highlighting different pay periods like weekly, bi-weekly, and monthly. The text also covers average pay calculations, overtime rates, and various wage plans, including commission-based, piece-rate, and per diem employees. By understanding these elements, employees can grasp their compensation structures, leading to better financial decision-making.

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Understanding Gross Pay: Hourly and Salary Structures in Employee Compensation

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  1. Chapter 1 Gross Pay

  2. 1.1 Hourly Pay and Salary

  3. Gross Pay for Hourly-Rate Employees • Employees- • Those who work for others • Employers- • The person or company an employee works for • Hourly Rate- • Certain amount for each hour worked • Gross Pay- • Total amount of money paid to an employee

  4. Hourly x Number of = Gross Pay Pay Hours Worked • $7.50 x 46 hrs = • $16.25 x 25 hrs = • 8hrs x 5 days = 40 hrs x $18.75= • 8+6+7+6+5= 32 hrs x $9 =

  5. Gross Pay for Salaried Employees • Salary- • Fixed amount of money for each time period worked • Pay per x Number of Time = Gross Time Period Periods Worked Pay

  6. Pay Periods • Weekly-52 - Bi Weekly-26 • Monthly 12 - 2x per Month-24 • Yearly/Annually-1 • Semiannually-2 E. $680 x 2 wks = F. $540 x 52 wks =

  7. 1.2 Average Pay

  8. Simple Averages • Average- • Single number used to represent a group of numbers • ($18 + $58 + $32) / 3= • ($2,400+$3,200+$1,500+$1,700)/4 • $264/38 • ($35,800+$47,000)/2=

  9. Averages in Grouped Data E. 5 x $12 = $60 2 x $9 = $18 + $11 $89/8= F. ($280 + $315 + $424 + $265)/ 4 =

  10. Unknown Items in a Set of Data G. 68+80+75+79= 77 x 5= 385-302 = H. 4 x 86 = 420-344 =

  11. 1.3 Regular and Overtime Pay

  12. Recording Hours Worked • How do you clock in? • Magnetic Strip Card • Time Card • Time Sheet • Computer Log-In

  13. Overtime and Overtime Pay Rates • Overtime- • Time worked beyond the regular working day or week • Time-and-a-half pay- • x 1.5 • Double time- • x 2

  14. 1.5 x Regular Pay Rate = Time-and-a-half rate (don’t round) 2 x Regular pay rate = Double-time rate • 1. $7.51 x 1.5 = $7.51 x 2 = 2. $8.76 x 1.5 = $8. 76 x 2 = 3. $13.67 x 1.5 = $13.67 x 2 = B. $11.25 x 1.5 = $11.25 x 2 =

  15. Regular and Overtime Wages • S1: Find the regular & overtime hours worked • S2: Find the overtime pay rate • S3: Find the regular pay • S4: Find the overtime pay • S5: Add regular and overtime pay

  16. C. Regular 8 + 8 + 6 + 8 + 8 = Overtime 1.75 + 0.5 = $13.69 x 1.5 = 38 x $13.69 = 2.25 x 20.535 = $520.22 + $46.20 =

  17. D. Regular 40 Overtime 45.3 – 40 = $17.50 x 1.5 = $17.50 x 40 = $26.25 x 13.4 = $700 + $351.75 =

  18. 1.4 Commission • Straight Commission Commission- An amount for each item sold or a percent of the dollar value of sales Quantity sold x rate of = commission commission • $1.30 x 74 = • $0.075 x 1,200

  19. Sales x Rate of commission = commission C. 0.15 x $9,500 = D. $2870 + $3,150 + $3,940 = $9,960 x 0.15 =

  20. Commission Based on Quota • Fixed amount is called quota • Have to meet quota before receive commission E. $2,890-$2,000 = $890 x 0.03 = $26.7 + $125 = F. $29,700 - $15,000 = $14,700 x 0.07 = $1,029 + $2,300 = $3,329

  21. Graduated Commission • Rate of commission increases as the sales increases G. $100,000 x 0.03 = $120,000- $100,000 = $20,000 x 0.05 = $3,000 + $1,000 = H. $112,000 - $85,000 = $85,000 x 0.15 = $27,000 x 0.18= $4,860 + $12,750 =

  22. Rate of Commission on Sales Rate of = Amount of / Sales Commission Commission I. $448 / $6,400 = J. $3,240 / $54,000 =

  23. 1.5 Other Wage Plans

  24. Piece-Rate Employees • Paid by the number of pieces you produce Number of Pieces x Piece Rate = Gross Pay Produced A. 7+6+9+8+5 = 35 x $18 = B. 56 + 44 – 6 = 94 x $1.20 =

  25. Per Diem Employees • Per Diem – • By the Day Per Diem Rate x Number of Days = Gross Pay C. $425 x 180 = D. $20 x 57 =

  26. Tip Employees • Tip - • Amount of $ given to someone for services provided Tip Percent x Total Bill = Tip Amount Tip Per Unit x Number of Units = Tip Amount

  27. E. 1. $10.20 x 0.15 = 2. $10.20 + $1.53 = F. 1. $7.60 x 0.15 = 2. $7.60 + $1.14 =

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