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Commissions, Royalties, & Piecework Pay

Commissions, Royalties, & Piecework Pay. Section 6-3. Pay Plans. Last week, we covered: Annual Salary – paid by the year Hourly Pay – paid by the hour What other types of pay plans are there? Commission Paid according to money from sales Royalty

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Commissions, Royalties, & Piecework Pay

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  1. Commissions, Royalties, & Piecework Pay Section 6-3

  2. Pay Plans • Last week, we covered: • Annual Salary – paid by the year • Hourly Pay – paid by the hour • What other types of pay plans are there? • Commission • Paid according to money from sales • Royalty • Paid according to money from sales (you are not seller) • Piecework Pay • Paid according to units produced

  3. Commission • Some jobs that get paid commission: • Real Estate Agent • Salesmen for department stores • TV – Sales • Any type of sales job

  4. Royalties • Some jobs that pay royalties • Author • Movie Director • Actor/Actress • Musician

  5. Piecework Pay • Jobs that have piecework pay plans: • Newspaper delivery • Field workers (pick corn, strawberries, etc) • Factory workers

  6. Advantages vs. Disadvantages • As an employee, what are the advantages of being paid commission or piecework? • What are the disadvantages? • As an employer, what are the advantages of being paid commission or piecework? • What are the disadvantages?

  7. Calculating Commission • Huey Gaines is paid a straight commission of 6% on his sales. During February, his sales were $38,000. What was his commission? Find his commission rate: Convert the percent to a decimal: Multiply the decimal by the amount of sales: 6% 0.06 0.06 x 38,000 = $2,280

  8. Calculating Commission • Melvin’s sales last month of a new tile cleaner were $9,500. If he receives a commission rate of 15% of all sales, what commission did he earn? Find his commission rate: Convert the percent to a decimal: Multiply the decimal by the amount of sales: 15% 0.15 0.15 x 9,500 = $1,425

  9. Calculating Commission • Jacqueline earned 15% commission on her monthly sales of $2,870, $3,150, and $3,940. What was her total commission for all three months. First Month: Second Month: Third Month: 0.15 x 2,870 = $430.50 0.15 x 3,150 = $472.50 0.15 x 3,940 = $591 Total Commission: = $1,494

  10. Calculating Commission • Liz receives a weekly salary of $200, plus 3% commission on her sales. Last week, she sold $29,700 of computer equipment. How much did she earn? Earnings = Commission + weekly Salary Commission = Weekly Salary = Earnings = = $891 0.03 x 29,700 = $200 = $891 + $200 = $1,091.00

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