# Chapter 2_ Earning an Income

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```					CHAPTER 2:
EARNING AN
INCOME

Math 10-3
INTRODUCTION, VOCABULARY,
WAGES AND SALARIES
 Who has had a job before?
 How did you get paid?

 Did you get paid overtime?

 How did they determine how many hours they
worked?
 Did they have any deductions? Etc.
IN ALBERTA, THE CURRENT MINIMUM
WAGE IS \$9.40 PER HOUR.

   Minimum wage is the minimum amount a
worker MUST be paid an hour, as set out by the
Provincial Government.

   The minimum wage in BC is \$8.75/hour. The
minimum wage in Sask. is \$9.50. The min. wage
in Ontario is \$10.25/hour.

   why there might be differences in minimum wage
WHAT IS THE DIFFERENCE BETWEEN A
SALARY AND A WAGE?

   Salary – paid a fixed amount every pay period.
This amount is determined usually in a contract
which is signed before employment starts.

   Advantages – paid the same amount every pay
period, regardless of hours worked/holidays etc.

   Disadvantage – not paid for any extra work you
might do.
   Wage – paid a fixed amount PER HOUR worked
during a certain pay period.

   Advantages – paid for any extra hours you might
work. Usually paid more per hour during certain
times (for example, working on holidays,
Sundays, evenings etc.)

   Disadvantages – if you don’t work, you don’t get
paid (for example, if you miss a day of work, or
you work fewer hours in a week than normal).
   Gross Pay – the total amount of money earned
in a pay period. AKA gross earnings. This is the
amount you make BEFORE deductions.
A PAY STATEMENT IS A FORM AN
EMPLOYER WILL GIVE YOU THAT
SHOWS EARNINGS FOR A DEFINED
PAY PERIOD.
 A pay period could be weekly, bi-weekly,
monthly, etc.
 *weekly – once a week (paid 52 times per year)

 *bi-weekly – every two weeks (paid 26
times/year)
 *monthly – once a month (paid 12 times/year)

 *semi-monthly – twice a month (paid 24
times/year)
 *annually – one year (paid once a year)
*HOW DO WE DETERMINE THE MONTHLY,
SEMI-MONTHLY, BI-WEEKLY AND WEEKLY
PAY FOR A SALARY?*
Ex. Brendan works at the Edmonton Journal. His
annual salary is \$35 650.
 Determine the following scenarios:

 If Brendan is paid monthly, how much will he make
gross monthly?
 12 pay periods per year: \$35 650 / 12 = \$2 970.83 /
month
 Paid Semi-Monthly?

 24 pay periods per year : \$35 650 / 24 = \$1 485.42
twice a month
 Paid Bi-Weekly?
 26 pay periods per year: \$35 650/26 = \$1 371.15
every two weeks

 Paid Weekly?
 52 pay period per year: \$35 650/52 = \$685.58
*HOW DO WE DETERMINE THE GROSS
PAY FOR WAGES?

   EX: Morgan makes minimum wage. He works 35
hours one week. How much will his gross pay be for
that week?

   *Multiply the number of hours worked by the wage
to get gross pay!*

   35 hours x \$9.40/hour = \$329.00

   *Always round MONEY to two decimal places!!!*
Employee Name: Christine
Thomas                                  How often does Christine
get paid? Weekly (24-18
Company:          Pay Period
McDonalds         Begin:
= 6 days = 1 week)
09/18/2010
Pay Period            If Christine gets paid the
End: 09/24/2010
same amount every week,
GENERAL
how much will she make
Employee ID:      Job Title:             gross in a month?
555777            Cashier                \$231.25 x 4
Address: 2020     Pay Rate: 9.25/h       weeks/month = \$925.00
Kingfisher Blvd
HOURS AND EARNINGS
   How much will she make
Descri   Rate     Hours    Gross         in a year? \$925.00 x 12
ption                      Earnin
gs            months/year = \$11 100
Regular 9.25/h    25       \$231.25
Employee Name: Robert Cooper
   How often does Rob get
Employer:           PP Begin:
ATCO Gas            09/4/2010
paid? Bi-Weekly (17 -4
= 13 days = 2 weeks)
PP End:
09/17/2010
Employee ID:        Job                  If Rob gets paid the
1234                Description:          same amount every pay
Technician            period, how much will
Pay Rate: 15.45/h *determine              he make in a month?
using gross earnings and hours            2 x 672.05 = \$1 344.10
worked
Descri    Rate      Hours    Gross
ption                        Earnin
   If Rob gets paid the
gs           same amount every
month, how much will
Regular 15.45/h     32       540.75
he make gross per year?
Sunday    16.45/h   8        131.60       12 x 1 344.10 = \$16
(rate +
1.00)
129.20
Total Gross Earnings         672.05
ASSIGNMENT: SALARIES AND
WAGES.DOC
DAY 2: HOURS WORKED –
COMPLETING TIME CARDS
HANDOUT:
ALBERTA.EMPLOYMENT.STANDARDS
FULL TIME VS PART TIME

   Full Time – usually considered to be between 35
- 44 hours per week. Typically, full time results
in 8 hour shifts per day, 5 days a week.

   Part Time - usually considered to be less than
35 hours a week. Typically, part time results in
shifts less than 8 hours OR fewer days are
worked per week.

   Shift – the amount of time you work.
GETTING PAID WITH A WAGE –
HOW ARE THE HOURS YOU WORK
TRACKED?
   Punch cards – at the start and end of every shift, you
insert a card into a machine that will record the date
and time. This card is then later used to calculate the
number of hours worked during a pay period.

 Time Card (Personal) - you may have to manually
record the time you start and end each shift. Sometimes
this is called “logged hours”.
 Time Card (Pay Roll) – you may work for a company
where a person logs your hours for you. It will be your
responsibility to inform them of any extra hours you
work, or any shifts you miss.
24 HOUR TIME – MOST JOBS WILL USE
24 HOUR (INSTEAD OF 12 HOUR) TIME.
TO DETERMINE THE TIME, SUBTRACT
12.

   Remember, in 12 hour time, the morning is am,
and the afternoon/evening is pm

 Ex. What time is 13:05? 13-12 = 1:05 pm
 What time is 22:45? 22-12 = 10:45 pm

 What time is 02:50? = 2:50 am
HOW DO WE DETERMINE THE
NUMBER OF HOURS WORKED?

   For example, you work from 9:30 – 14:50. How many
hours have you worked?

 1st add minutes to the start time to match the
minutes of the end time
 9:30 + 20 minutes = 9:50

   2nd subtract the hours: 14 – 9 = 5 hours

   3rd combine hours and minutes = 5 hours + 20
minutes.
   Employers don’t usually pay for every minute of
work. Typically you will get paid for every
quarter hour you work. Round to the nearest
quarter (0, 15, 30, 45)

   20 minutes – closest to 15 minutes.

 What part of an hour is 15 minutes?
 x/1 = 15/60 = 0.25

 4th Add hours and parts of an hour together:
5 + 0.25 = 5.25 hours.
EX: COMPLETE THE FOLLOWING TIME
CARD:
TIME CARD – Telus Communications

Employee Number: 5872            Approval:
Employee Name: Bill Ngo

For Week Ending: 19/11/10

Date         Start (IN)   End (OUT)    Total Hours
3 hours, 2minutes = 3 hours
15/11/10          09:03          12:05

5hrs, 4 mins, = 5 hours
16/11/10          16:02          21:06
3 hrs, 2 mins = 3hours
17/11/10          08:58          12:00
5 hrs, 31 mins = 5 hours and 30 minutes = 5.5 hours
18/11/10          16:30          22:01

3 hours, 28 mins = 3 hrs 30 mins = 3.5 hours
19/11/10          08:32          12:00

Total Hours Worked during P.P. 20 hours
IF BILL MAKES \$10.25 PER HOUR, HOW
MUCH WILL HE MAKE GROSS FOR THIS
PAY PERIOD?

   20 x 10.25 = \$205
DAY 3: OTHER WAYS TO
EARN – PIECEWORK AND
COMMISSION
SALARY AND WAGE AREN’T THE ONLY
WAYS TO EARN AN INCOME. OTHER
WAYS INCLUDE:
   Self employment – a person who works for
themselves rather than for an employer.

   Piecework – when someone is paid a set rate for an
amount produced

   Commission – an amount (usually a percentage)
paid to someone for a business transaction

   Contract – a legal agreement that outlines terms,
conditions and payments for work to be done
   Brainstorm as a class examples of occupations for
each vocabulary words above. Also, brainstorm
employed.
PIECEWORK

   Ex. Michelle is an             *Multiply price by
Artisan – a craftsperson        quantity, then add
who specializes in              totals together*
decorative arts. She
makes pottery bowls.
\$45 x 8 = \$360
She sells large bowls for
\$45.00 and medium               \$35 x 11 = \$365
bowls for \$35.00. One
weekend at a farmers            Total: \$745
market she sells 11
medium and 8 large
bowls. How much does
she make?
COMMISSION
REVIEW: PERCENT MEANS OUT OF 100! TO
FIND THE PERCENT OF NUMBERS, CHANGE
THE PERCENT TO A DECIMAL, AND THEN
MULTIPLY THIS DECIMAL BY THE NUMBER
IN QUESTION.

   Ex. Lindsay works at      1st change % to a
a car dealership. She      decimal
gets 3% commission        3% = 3/100 = 0.03
on all sales. Last
month she sold a total    2nd multiply decimal
of \$44 375. How much       by total sales
will her gross
 0.03 x 44 375 = \$1
earnings be?
331.25
   Ex. Dan works as a         1st Add up his sales:
real estate agent. He      299 450 + 380 200 = \$
gets 0.2 % commission       679 650
on the sale price of         nd
 2 change % to a
any house he sells.         decimal
Last month he sold 2
 0.2% = 0.2/100 = 0.002
houses: \$299 450, and
rd
\$380 200. How much         3 multiply decimal
will his gross earnings     by his sales.
be?                        0.002 x 679 650 = \$1
359.30
   Ex. Carl works at The        1st find out his hourly
Keg restaurant. He            wage amount
makes \$8.80/h plus he        \$8.80/h x 36 hours =
gets to keep 75% of his       \$316.80
tips. If one week he
   2nd change % to a
works 36 hours and
decimal, and multiply
makes \$155 in tips,
by his tips
what will his gross
earnings be?                 75% = 75/100 = 0.75
0.75 x 155 = \$116.25
   3rd add his wage and
tips together to get total
   \$316.80 + \$116.25 =
\$433.05
EX. ANDREW STARTS A NEW JOB
SELLING APPLE COMPUTERS. THE
COMPANY OFFERS HIM THE
FOLLOWING PAY OPTIONS:
 Base salary of \$500     Amount    Option 1   Option 2
plus 2% of all sales               Gross      Gross
 Straight commission               Earnings   Earnings
of 6%                     \$0        \$500        \$0

 Determine Andrew’s
\$5000      \$600       \$300
gross earnings for
both options based on
the following sales:    \$10 000     \$700       \$600

\$15 000     \$800       \$900

\$20 000     \$900      \$1 200
   When is option 1 a      Which would you
better choice?           choose?

   When is option 2 a
better choice?
DAY 4:EXTRA PAY:
OVERTIME, VACATION,
BONUS
HANDOUT
ALBERTA.STANDARDS.OVERTIME TO
STUDENTS.
OVERTIME INCOME CAN BE
CALCULATED EASILY.

   1st Determine the number of over time hours
worked

   2nd multiply this by the overtime rate (time-and-a
-half = x 1.5, double time = x 2) and current wage.

   3rd add overtime to regular work hours.
   Ex. Rebecca in one          Regular Pay: 40 x
week works 40 hours,         9.25/hr = \$370
plus 8 hours over
time. She makes             Overtime Pay: 8 x 1.5
\$9.25/hr plus time and       x 9.25 = \$111
a half for overtime.
How much will she
make gross?                 Total Gross: 370 + 111
= \$481
   If you have a service industry job (retail,
restaurant, fast food, etc.) you will likely have to
will likely get paid at least time-and-a-half for all
hours worked on a holiday.
   Ex. Trent works at         Regular: 8 + 6 + 4 =
Safeway. On                 18 hours x 8.95/hr =
Thanksgiving Monday         \$161.10
he works 5 hours,
Tuesday 8 hours,           Holiday Monday = 5
Thursday 6 hours and        hours x 1.5 x 8.95/hr =
Friday 4 hours. If          \$67.13
Trent makes \$8.95/h
regular, how much
will his gross pay be      Gross Pay: 161.10 +
for the week?               67.13 = \$228.23
   Some service industry jobs will give you “vacation
pay” instead of paid vacation time; this will likely
be a percentage of your yearly gross pay that will
work out to be the same as two weeks of pay.
This will be either paid out to you in a lump sum
annually or on every pay check. If you take time
off, you will not be paid while you are away.
   Ex. Sarah gets vacation pay as      1st determine her weekly gross
4% of her gross income paid          pay:
annually in January. If she         10.50/hr x 35 = \$367.50
makes \$10.50/hr for a 35 hour
work week, how much will she        2nd determine her annual gross
make vacation pay?                   pay
   \$367.50 x 52 weeks/year = \$19
110
   3rd find her vacation pay
*remember to change the % to a
decimal!
   4% = 4/100 = 0.04
   0.04 x 19 110 = \$764.40

   If Sarah gets her vacation pay
every pay period, how much
will this be?
   764.40 / 52 weeks/year = \$14.70
per weekly pay period
ASSIGNMENT: OVERTIME AND
HOLIDAYPAY.DOC
DAY 5: DEDUCTIONS- UNION
DUES, HEALTH PLANS,
CHARITABLE DEDUCTIONS
ETC.
 Gross Income/Pay – income earned before
deductions
 Net Income/Pay – Income received after

 Before taxes are calculated on gross pay, there
are certain “before-tax” or “tax exempt”
deductions.
 These include:

 Union dues, RRSP (registered retirement savings
plan), charitable donations and pension
   Ex. Lilly works as a            1st determine here gross
receptionist. She makes          annual income: \$650 /
\$650 a week. Her union           week x 52 weeks = \$33 800
dues are \$14.10 per pay         2nd determine her annual
check. What percent of           union dues \$14.10 / week x
Lilly’s gross pay does she       52 weeks = \$733.20
pay in union dues?
   3rd determine the % of her
annual gross income that
she pays for union dues:
   *remember, percent is part
of a whole*
   \$733.20/\$33 800 =
0.0216…
   0.0216… x 100 = 2.2% of
her gross income is spent
on union dues.
   In addition to these deductions, many people pay
amounts from their gross pay for a wide range of
benefits and programs such as dental plans
and savings plans.

   Many employers also offer lifestyle benefits.
Such as discounts on merchandise, services, or
bonus items like movie tickets etc.
   Marmot Basin example
   Ex. You have a 16-week contract at Marmot
Basin in Jasper, where you will be working
between 15 hours a week. Your employer offers
you a choice of

 \$10.75/hr
or
 \$8.80/hr plus a weekday season pass that has a
value of \$680.
 How many hours total     How much will you
will you work during      make for the first
the 16-week contract?     choice?
 16 week x 15 hours       \$10.75/hr x 240 hrs =
/week = 240 hours         \$2 580
   How much will you         Which would you
make for the second        choose? Why?
choice?

   \$8.80/hr x 240 hrs =
\$2 112 PLUS a \$680
season pass.
EX2. CONSIDER
Employee Name: Lilo Stitch       THE FOLLOWING PAY
STATEMENT
Company:                             Pay Period Begin: 09/24/2010
Pay Period End: 10/01/2010
West 49
Employee ID: 6262                    Job Title: Sales Associate
Description            Rate                                Hours
Regular                10.50/h                             30
Before Tax Deductions                                      Amount
Union Dues                                                 9.75
RRSP                                                       20.50
TOTAL BEFORE TAX DEUDCTIONS:
Benefits                                                   Amount
Extended Health Care                                       15.10
Dental                                                     9.70
TOTAL BENEFIT DEDUCTIONS:
TOTAL DEDUCTIONS:
NET PAY:
DAY 7: CPP, EI AND INCOME
TAX
   * Remember: Taxable Income – Your income,
AFTER DEDUCTIONS is taxed by both the
federal and provincial governments.

   *NOTE: Taxable income is GROSS INCOME
minus any tax exempt deductions such as
pension, RRSP, union dues etc.
   Canada Pension Plan (CPP) – Provides
income for workers after they retire. Every
employee between 18-65 must pay into it.

   To estimate CPP deductions, use 4.95% of
your earnings up to a max. deduction of
\$2,163.15
   Employment Insurance (EI) – A fund that
employees pay into to insure themselves against
being unemployed. To estimate, use 1.73% of
your earnings (up to earnings of \$43 200). Your
employer usually pays 1.4 times your
contribution into the fund.

   THE MAXIMUM contribution amount for the
employee is \$747.36
THE FEDERAL GOVERNMENT
DIFFERENT RATES:

Taxable Income (\$)       Federal Tax Rate
0 to 31 677.00           16%

31 677.01 to 63 354.00   22%

63 354.01 to 103 000.00 26%
   Provincial tax rates vary from province to
province…. Alberta is currently 10%
 Go through the following example with the students
 Ex. Simon earns a biweekly salary of \$1152.

 a.  What is Simon’s gross yearly salary?

 Biweekly = 26 times paid per year
 \$1152 x 26 = \$29 952
   b. How much will Simon pay in CPP and EI each year?

 CPP = 4.95% of gross earnings *change to a
decimal!* 4.95% = 0.0495
 \$29 952 x 0.0495 = \$1 482.62

 EI = 1.73% of gross earnings *change to a
decimal!* 1.73% = 0.0173
 \$29 952 x 0.0173 = \$518.17
   d.   How much Federal tax does Simon pay?

   \$29 952à Simon is in the first range (16%)
*change to a decimal!* = 0.16

   \$29 952 x 0.16 = \$4 792.32
   e.   How much provincial tax does Simon pay?

 Alberta Income Tax rate is 10% *change to a
decimal!* = 0.10
 \$29 952 x 0.10 = \$2 995.20
   f.   Determine Simon’s total year deductions

   \$1 482.62+ \$518.17 + \$4 792.32+ \$2 995.20=
\$9 788.31
   g.   How much does Simon earn a year net?

   \$29 952 - \$9 788.31 = \$20 163.69
   h.   What is Simon’s biweekly take home pay?

 *biweekly = 26 times paid per year!*
 \$20 163.69 / 26 = \$775.53
DAY 8: SELF EMPLOYMENT
   Graphs are a visual way to represent data.

   A circle graph is divided into pieces to represent
part of 100%. An entire circle graph should add
up to 100%.
   For example:
   50% of people prefer coke
   25% prefer Pepsi
   15% prefer sprite
   And 10% prefer Root
Beer.

   Draw a graph to represent
this à
   *Notice that ½ of the
circle is represented by
coke (50%!)
IF YOU POLLED 325 PEOPLE, HOW
MANY WOULD YOU EXPECT TO PREFER
COKE?

   50% = 0.50    325 x 0.50 = 162.5 people

   SO about 162 people (we cannot have half a
person!)
A BAR GRAPH REPRESENTS DATA WITH
BARS:
   About how many students take the bus in 5th
grade? Go to the top of the 5th grade bar, and look
to the left à about 80 students.

   To construct a bar graph, create an appropriate
scale on the left-hand side (the up and down or Y-
axis) and a scale on the bottom (the left to right
or X-axis).
ASSIGNMENT:
SELFEMPLOYMENTPROJECT.DOC

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