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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
    across Canada?
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
WHAT ARE THE ADVANTAGES AND
DISADVANTAGES OF EACH PAY PERIOD?
*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
    advantages and disadvantages of being self
    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
    work on holidays. See handout for more info. You
    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
  deductions (your “take home” pay)

 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
Address:                             Pay Rate: 10.50/h
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
TAXES YOUR INCOME AT
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
  on an over-head:
 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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