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WAGES AND SALARIES

WAGES AND SALARIES. WAGES AND SALARIES It is important that employees are properly rewarded for the work they do. PAYMENT SCHEMES There are a number of methods which can be used to reward employees for the work they do. Annual salaries Time Rates Piece Rates Commission Fees

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WAGES AND SALARIES

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  1. WAGES AND SALARIES lc/pm

  2. WAGES AND SALARIES It is important that employees are properly rewarded for the work they do. lc/pm

  3. PAYMENT SCHEMES • There are a number of methods which can be used to reward employees for the work they do. • Annual salaries • Time Rates • Piece Rates • Commission • Fees • Fringe Benefits lc/pm

  4. ANNUAL SALARIES • Fixed amount agreed per year • Hours and conditions of work laid out in Contract of Employment • Suitable method for permanentfull time staff • Suitable for professional, management positions lc/pm

  5. TIME RATES Paid hourly rate, eg £5.00 per hour Standard working week, eg, 35 hours per week Basic pay calculated £5 x 35 hours = £175 Hours worked in excess of standard pay is OVERTIME Overtime may be at time and a half or double time. Double time = £10; Time and a half = £7.50 per hour Gives guaranteed income for employees Used where quality of work is more important than time taken Suitable for service sector workers lc/pm

  6. PIECE RATES • Pay is linked to output • Agreed rate for every item produced eg £1 per garment completed • Used as an incentive, the more a worker produces the more they will earn • Workers usually given target to meet • Can result in low wages • Need for quality control to ensure goods made are of a standard • Used in manufacturing industries lc/pm

  7. COMMISSION • Used in sales, eg insurance, telesales etc • Some or all of employees’ earnings are based on the amount of sales they make eg, 10% commission paid on monthly sales total of £10,000 = commission of £1,000 • Used as an incentive to workhard and as a reward • Wages can fluctuate greatly from month to month depending on sales lc/pm

  8. FEES • Payment for ‘one’off’ tasks • Tasks geared towards needs of clients • Amount paid will depend on time taken and difficulty of task • Examples • Solicitors • Performers lc/pm

  9. FRINGE BENEFITS • Payments otherthanwages or salaries • Often made to executive, management and professionals • Some benefits are subject to tax • Have grown in importance, gives status to people Examples • Private medical insurance • Company car • Free transport • Subsidised meals lc/pm

  10. DEDUCTIONS No matter which method of payment is used to calculate GROSS PAY, deductions are then made to give NET PAY (take home pay) GROSS PAY less DEDUCTIONS = NET PAY lc/pm

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