Unit 3: Financial Literacy Big Ideas Calculate how much you will earn, given the rate of pay and amount of time worked Learn about a range of payment types that vary from employer to employer and industry to industry Calculate deductions and find net pay Competency Focus: Understanding & Solving Implement multiple strategies to solve problems in both abstract and real-life situations. Develop, construct, and apply mathematical understanding through play, inquiry, and problem solving. Communication & Representing Use mathematical vocabulary and language to contribute to mathematical discussions. Develop mathematical understanding through concrete, pictorial, and symbolic representations. Learning Outcome Course Concepts Self-Assessment Pre Post I can determine gross pay using the number of hours worked and the hourly rate of pay I can solve problems that involve financial literacy I can explain the range of payment types that vary from employer to employer and industry to industry I can determine payroll deductions and net pay.
Vocabulary minimum wage pay statement gross pay hourly wage overtime bonus biweekly semi-monthly piecework commission shift premium contract salary benefits CPP EI income taxes deductions taxable income net pay
Unit 3: Financial Literacy Lesson 1: Wages & Salary and Commissions Ways of Earning an Income People who work earn their income in different ways. Their income is the money they receive for the work they do. The way they are paid depends on the type of job they have. hourly wage wage and tips salary commission salary and commission royalties piecework contract a for each hour of work examples: store clerk, fast-food restaurant workers, etc. an plus varying amounts in tips for services provided examples: hotel worker, waiter/waitress, etc. a for work, usually expressed as an amount per year, but paid (e.g. every two weeks, twice a month, or monthly) examples: teacher, firefighter, police officer, etc. a payment based on of the worker s sales examples: real estate agent, car salesperson a smaller salary plus a percentage of the worker s sales examples: many different salespeople such as furniture salesperson a payment for that is marketed and sold examples: author, screenplay writer, musician a payment based on created or completed examples: sewing machine operator, cable TV installer, factory workers, fruit picker, etc. a payment for and/or for a fixed amount of work examples: editor, electrical contractor, building contractor, etc. Gross Pay/Gross Income/Gross Earnings The total amount of money a person earns at their job is called gross pay. Gross pay is one factor you can consider when you select a career. To calculate gross pay, you multiply the hourly rate of pay by the number of hours worked. gggggggggg pppppp = nnnnnnnnnnnn oooo hoooooooo wwwwwwwwwwww hoooooooooo rrrrrrrr oooo pppppp At many jobs, if you work extra hours or on statutory holidays, you earn a higher hourly rate. The word overtime can refer both to the extra time worked or the extra money earned. Many full-time jobs have a 40-hour work week, but other jobs may have different regular hours. Overtime wage is often paid at time and a half or double time. Self-employed people sometimes charge a higher rate for work done on weekends or holidays. If you work a night shift or a late afternoon shift, the employers usually pay a shift premium.
Example 1. Jaskiran s regular rate of pay is $11.50 an hour. a) What is her gross pay if she works the following hours? Monday 4 ¼ h Wednesday 3 ¾ h Friday 3 h Saturday 5 ¼ h b) Find Jaskiran s time and a half hourly rate. Then find her double time hourly rate. Round answers to the nearest cent. How much will Jaskiran earn if she works four hours of overtime paid double time on Sunday? Time and a half hourly rate: Double time hourly rate: c) What will be Jaskiran s gross pay for that week be? What is the weekly income of Arnold who earns a $28,500 salary? Monthly? Daily (5 days a week)? Karn works full-time in a fast-food restaurant. His regular work week is 40 hours and he earns $10.75 an hour. If he works more than 40 hours a week, he earns time and a half for the extra hours. One week, he worked the hours listed below. What will Karn s gross pay for that week be? Monday 7 Tuesday 7 Wednesday 8 Thursday 8 Friday 8 Saturday 6 Example 2. Which of the following jobs pays more per hour? A child care worker earns $952.43 for 41 hours of work per week. A secretary makes a yearly salary of $47,840 and works 40 hours per week. A mechanic works 8.5 hours/day, 5 days a week, and earns $1147.50 a week.
Jian works a 35-hour work week and is paid time and a half for overtime hours. His hourly rate is $13.26. His friend Clive works a 37.5-hour work week and is also paid time and a half for overtime. His hourly rate is $13.46. If both Jian and Clive work 42 hours one particular week, who earns the most money? Reflection: If you get time and a half on Saturdays and double time on statutory holidays. Is it better for you to work two Saturdays or one statutory holiday? Explain your answer. Commission, Performance-Based Income, and Quota: Performance-Based Income is an income based on the amount of work completed or goods and services sold. This is not an hourly wage. 1. Straight Commission Earning a straight commission means that a person will not receive an hourly wage or salary. Instead, the person s salary will be calculated as a percent of sales or a specific amount for each item sold. Commission is an amount paid as income based on a percentage of sales. SSSSSSSSSS AAAAAAAAAAAA CCCCCCCCCCCCCCCCCCCC PPPPPPPPPPPPPPPPPPPP = CCCCCCCCCCCCCCCCCCCC AAAAAAAAAAAA Example 3. Jas makes 12.5% commission on the total sale of every equipment he sells. If he earned $1800 in commission, how much equipment did he sell? Preet earns a 5% commission on all sales he makes at the car dealership. He sells 4 used cars for $23,799, $29,748, $17,849, and $33,318. How much does Preet make on these sales?
Harleen is a travelling salesperson. She is paid back for using her car to drive at a rate of $0.41/km and she receives a 35% commission on all her sales. If she drives 2012 km in one month and sells $6200.00 worth of merchandise, how much will she be paid? 2. Salary plus Commission A person earns a salary paid by the hour, week, or year, plus a commission. The commission may be calculated on the value of each sale, or as a percent of the sales above a certain quota. iiiiiiiiiiii = ssssssssssss + cccccccccccccccccccc aaaaaaaaaaaa Quota is a set amount; could be a set amount of sales or a set amount of items manufactured. Example 5. Mandy works at furniture store and is paid a salary of $1000 per month plus a commission of 10% if she reaches a sales quota of $8000 dollars. Last month, Mandy sold $32 000 worth of furniture. What was her monthly income? 3. Graduated Commission When a person is paid increasing commission rates depending upon the amount of goods or services sold. Example 6. Seth sells screen doors for a company. He earns 20% commission on his first $1000 of sales per month and 30% on sales above $1000. Last month, he earned $2 600. What were his total sales for the month?
4. Piecework An employee is paid based on the number of items they make or repair. This is similar to commission because we multiply the quantity by a specific rate. iiiiiiiiiiii = qqqqqqqqqqqqqqqq ssssssssssssssss rrrrrrrr Example 7. Miranda is a tree planter working in the interior of BC. She earns 65 for every tree that she plants. Listed below is a record of the number of trees that she planted each day last week. Determine her earnings for the week. Day Number of Trees Planted Monday 120 Earnings Tuesday 139 Wednesday 107 Thursday 141 Friday 94 Total Example 8. Alan is a pie maker for a bakery. He earns $35 for every 100 pies that he makes. Alan makes an average of 450 pies per day. What would be his average weekly income? Roop works at an automotive shop in the tire section. He earns $12 for every new tire he puts on a car, $15 for every flat tire he repairs and $8 for every car that he rotates the tires on. Examine his last work day report and determine his earnings. Employee: Roop Date: January 10, 2018 New Tires 5 pairs @ $12 Flats 5 @ $15 Rotations 4 pairs @ $8 Total If you are paid by the piece, you make a better wage if you are quick and accurate. The slower you are, the less you earn, and you will not be paid for items that are not properly completed.
Lesson 2: Net Pay & Deductions Net Pay and Deductions When you earn an income, your paycheque is always lower than your gross pay. This is because there are deductions from your gross pay. Deductions are the amounts of money taken off your gross pay for income taxes (federal and provincial), union dues, disability insurance, employment insurance (EI), Canada Pension Plan (CPP) or other pension plans, and health or other benefits. Income taxes are only paid on your taxable income, which is the income after certain deductions are made but before other deductions are made. Deductions that are deducted to determine your taxable income include union dues, certain company benefits like parking, and company pension plans. Your net income or net pay is the final income after all deductions have been taken off your gross pay. It is the amount that is on your paycheque. Net pay is also called take-home pay. Example 1. Jaar s gross pay was $785. His net pay was $625.42. How much were his deductions and what percentage of his gross pay were his deductions? Example 2. If the federal tax rate is 15%, how much is deducted from your $750 paycheque for federal taxes? Cam worked 37 hours in a week and his hourly rate is $11.45. What is his net pay of the week if his deductions are $143.65? Deduction Tables Another way to determine deductions for federal tax, provincial/territorial tax, EI, or CPP is to use a deduction table. These are published by the Government of Canada each year for federal and for each province/territory. To use a deduction table, find the taxable income in the left column and read the deduction from the appropriate column on the right side. Tax tables have different claim codes so read them carefully.
Example 3. A hotel clerk in Whistler, BC earns $2430 each month. His Claim Code is 2. How much federal and provincial taxes will be deducted from his pay? Use the portions of the deduction tables below to answer the question. Cindy earns an hourly wage of $9.75, and she works 40 hours per week. She is assigned Claim Code 1. Calculate Cindy s gross pay. Then using the tables below and on the next page, determine her deductions for federal tax, provincial tax, EI, and CPP, and calculate her weekly net pay.
Time Cards Often employers keep time records for employees using time cards. The employee will enter the times they worked and submit the time card on a regular basis in order to be paid. Example 4. Antonio s time card for the last week is below. How many hours did he work in this week? Time Card Antonio DAY IN OUT Hours Worked Monday 9:15 11:45 Tuesday 8:45 11:30 Wednesday 1:00 4:30 Thursday 9:00 12:45 Friday 9:30 1:00 Total
Harry works as a part-time warehouse technician. He often works a split-shift, where his work day is split between two time blocks. He gets paid $12.76 per hour. His time card is shown below. Complete the chart to show how many hours Harry worked in this week and calculate how much did he earn during this week? Time Card Harry Morning Afternoon DAY IN OUT IN OUT Monday 7:45 9:00 5:00 7:45 Total Hours Tuesday 4:00 8:00 Wednesday 9:00 11:00 Thursday 9:00 11:00 3:00 5:00 Friday 3:00 6:00 Saturday 9:00 12:00 TOTAL Try. Tom earns $17.50 an hour. If he works more than 8 hours on any day, he gets paid double the hourly rate. His shifts for one week are shown on the time card below. Complete the last column in the time card showing the hours Tom worked for each day. a) How many regular hours did Tom work during this week? b) How many overtime hours did Tom work during this week? c) Calculate Tom s gross pay for the week shown above.
Practice Questions: (on a separate piece of paper) 1.a) Ross is a drilling technician who completes the following timesheet for this week. His wage is $21/hr. what is his gross pay this week? Monday Tuesday Wednesday Thursday Friday 7:00 a.m. 5:00 p.m. 7:30 a.m. 4:30 p.m. 8:00 a.m. 7:30 p.m. 7:00 a.m. 4:00 p.m. 7:00 a.m. 3:00 p.m. b) Ross works the same number of hours each week for 2 months. He is paid bi-weekly. How much does he receive in each pay in a month with two pays? three pays? 2. A worker on an offshore oil rig earns $35/hr. Shifts are 12 hours in length and include 8 regular hours and 4 overtime hours. Time-and-a-half is earned for overtime hours. a) Calculate the gross monthly pay for Kelly who works 12 shifts this month. b) If Kelly is paid semi-monthly, what is the value of each pay? 3. Marilee installs and repairs telephone lines. She works a 40-hour week and her regular hourly rate is $22.58. She is paid double time for each hour she works on holidays and weekends. She is paid time-and-a-half for all other overtime hours. One week Marilee works 53.5 hours from Monday through Friday, including eight hours on a Monday statutory holiday. Find her gross pay for the week. 4. You are comparing two options for summer jobs. One job is as a summer camp counsellor for 10-year-olds and takes place at your local community centre. The pay is $240.00 a week for a period of 6 weeks. The other job is working as a house painter. It would require you to commute to different locations and pays a rate of $11.50/hr. You can work 8.5 weeks at this job. a) What factors would you consider tin choosing between the two jobs? b) What additional information would you need to project your earnings from each job? c) Which job might involve working some overtime? Explain why? d) Under what circumstance would working overtime appeal to you? Why might you choose not to work overtime? 5. Gurjot, a cabinet installer, earns income on a piecework basis. When he has to return to a customer s home on a service call to make changes or repairs, he is paid by the hour. The service-call rate is $30.00 an hour. a) If Gurjot installs 6 upper cabinets at a rate of $25.00 each, 6 lower cabinets at a rate of $15.00 each, and returns twice for service calls that each take 3 hours, how much will he earn in all from this job? b) This of two ways that piecework benefits a working person. c) What advantages or disadvantages might piecework have for an employer? 6. Jas gets an annual bonus of 15% of his base salary if he exceeds sales quotas by $10,000.00. If his base salary is $42,000.00 and he exceeds the sales quota by the required amount, what is his bonus? What is his total salary for that year? 7. Mark applies for a job as a commercial transport inspector in Tête Jaune Cache, BC. He receives a starting salary of $38,901.76 and an isolation allowance. If Mark grosses $41,610.52 for the year, what would his monthly isolation allowance be? 8. Grace has two job offers. Job 1: Commission of 12% on sales Job 2: Base salary of $600 plus commission of 5% on sales a) Which job offer would Grace earn the most for typical weekly sales of $9000? b) Grace wrote down the information incorrectly. Job 2 offers a commission of 6%. How will that affect which job would pay more? 9. A camp counsellor earned a weekly salary of $250.00. a) He receives a raise of 1.2%. What is his new salary? b) He received a raise and his salary increased to $275.00 a week from $250.00. What was his percent rate of increase in pay?
10. For each of the following gross earnings, calculate the total of the C.P.P., E.I., and income taxes deductions. Use the tables on page 12. a) Annual $20400, Claim Code 0 c) Weekly $393.46, Claim Code 0 b) Annual $20652, Claim Code 1 d) Monthly $1716, Claim Code 2 11. Helen is paid $3170.06 semi-monthly. She pays deductions of $17.12 for union dues and $126.40 for the company pension plan. a) What is her taxable income? b) Explain which is higher, her taxable income or her net pay. 12. Sean is considering two restaurant jobs. Each job requires 40 hours of work a week and pays the same hourly rate. The first job has a day shift form 07:00 to 16:00, with a one-hour unpaid lunch break. The second job has a split shift. The first part runs from 07:00 to 11:00; the second part runs from 17:00 to 21:00. What are the advantages and disadvantages of each job? Which would you prefer? Why? 13. Henry usually finds 40% of his pay goes to deductions. How much will his weekly take-home pay be if he makes $12.10 an hour and works 40 hours? 14. Michelle works part-time and is paid semi-monthly. For her wages, she estimates her CPP contribution to be about 3% of her gross pay, her EI contribution to be about 2%, and her income tax about 20%. If she is paid $500.00 semi-monthly, what are her total deductions, and how much is her take-home pay? Describe two methods of finding Michelle s total deductions. 15. Complete the chart. Hours in excess of 8 h/d are paid at time-and-a-half. Employee s Name Hours Worked Regular Earnings M T W T F Hourly Rate Reg. O.T. Total B. Toor 8 8 9 7 9 $8.40 R. Wong 8 9 9 8 8 $7.50 M. Levesque 8 7 7 9 8 $9.70 A. Lang 6 8 8 9 7 $10.20 V. Le Roy 9 8 10 9 8 $14.60 16. Aiden received a pay stub for his job as a school maintenance worker on the last work day of March. This is his 6 th paycheque this year. He worked the same number of regular and overtime hours each pay period. For the current pay stub, calculate a) the year-to-date regular hourly pay (A) b) the year-to-date gross pay (B) c) the year-to-date total deductions (C) d) the current net pay (D) e) the year-to-date net pay (E) 17. Pierre earns $3461.54 a month, paid semi-monthly. Each pay period, his employer deducts $172.98 federal tax, $69.82 provincial tax, $78.45 for CPP, and 1.73% for EI premiums. Pierre drives his car to work, so he purchased an annual staff parking permit for $750.00 He pays for the permit by monthly payroll deductions, which are made at the end of each month. a) On the 15 th of last month, Pierre s take-home pay was$1379.58. Was he paid the correct amount? Explain how you know. b) On the 31 st of last month, Pierre s take-home pay was$1254.58. Was he paid the correct amount? Explain how you know.