B. Income Math 10: A and W WA10.11 Demonstrate understanding of income including: wages salary contracts commissions piecework self-employment gross pay net pay.

Key Terms: Find the definition of each of the following terms: Benefits Bonus Commission Contract Deductions Gross Pay Minimum Wage Net Pay Overtime Pay Statement Piecework Salary Self-employment Shift Premium Taxable Income Tips Wage Semi-monthly Bi-weekly

1. Wages and Salaries WA10.11 Demonstrate understanding of income including: wages Salary gross pay

1. Wages and Salaries Math on the Job p. 54 Read through together and solve

What we just calculated in math on the job for Joseph was his Gross Pay. Gross pay is the amount of money you make in a pay period before deductions Net Pay is the amount you make after deductions which we will talk about more later.

Most of you that have had a job will have been paid a fixed amount paid hourly or weekly. Many tradespeople and people in the service industry earn wages calculated this way.

What are some jobs that you can think of that would be considered a trade? Plummer, Electrician, Carpenter What are some jobs that you can think of that would be in the service industry? Waitress, taxi driver, hairdresser

When employees are asked to work more than 40 hours a week (may be more or less depending on job, union, etc.) this is referred to as overtime When people work overtime their pay increases. What is reasonable for a pay increase for overtime work? Usually time and a half or double time

A Raise is different than overtime because a raise is an increase in your wage that is received all the time while overtime is only for hours worked over what you are expected to work.

How can you calculate monthly wages when you are paid an hourly wage? For example, if you make $9.00/h, how much do you make in a month if you work 8 hours a day?

The reason for many raises is because the cost of living increases, these are cost-of- living raises. These raises are a result of the cost of living increasing, such as housing, common consumer goods. If these increase in price it can result in your wage or salary increasing.

Activity 2.1 – Interpreting Pay Statements p. 55 Work through the activity with a partner

Discuss the Ideas – Types of Earnings p. 55 Work through together

People can be paid: Weekly, bi-weekly, semi-monthly, daily, hourly, annually, by contract, on commission and by piecework Daily, hourly or weekly paid jobs: Construction, waitress, plumber, electrician, part time jobs

Salary, Bi-weekly, Semi-monthly, and Monthly paid jobs: Full time jobs, teaching, administration jobs, management Piecework: Delivering newspaper or flyers, manufacturing, sewing, flooring installation, and cabinet installation

Commission: Retail sales, car sales, and selling real estate Contract Work: House painting, construction work

Advantage of being paid weekly is you get more pay periods (52 a year instead of 12 per year) and you would get paid sooner when starting a new job A reason workers are not paid weekly is it would be very expensive for an employer to calculate payroll every week.

Most people on salary do not get paid overtime but often get something in return for putting in extra hours in lieu of payment. For example I get EDOs for coaching volleyball, track, etc.

Mental Example Hoe many hours are there in a work week that is made up of five 7.5 hour days? How many hours would that be in a year?

In your binder list three of your favorite leisure activities Now try to think of 2 or 3 jobs that you might find interesting that are linked to these activities.

Example 1

Example 2

Example 3 Kelsey ‘s regular rate at her job in a warehouse is $9.86 an hour. She works 8 hours a day. She has to work a extra shift on a holiday, and her overtime rate is time and a half. What is her hourly rate on the holiday? What are Kelsey’s gross earnings for the holiday?

Example 4

Activity 2.2 – Mind Mapping Create a mind map that connects kinds of math in different trades Make a chart of job or chores you have or have had that involve math

Mental Example 1. An office assistant who earns $10.00 an hour was paid $120.00 for 10 hours of work. How is this possible?

Building your Skills Ex. 2.1 (p. 60) #1-10

2. Other Ways of Earning Income Demonstrate understanding of income including: wages salary contracts commissions piecework self-employment

2. Other Ways of Earning Income Math on the Job p. 64 This is just one example of how to calculate piecework. You could just charge an amount for each item produced. Read through together and solve

Piecework, from Math on the Job, has people paid according to the number of items they complete For example, a person delivering flyers at five cents a flyer, or a apple picker paid $0.65 a pound. The number completed in a hour determines your hourly wage.

A Contract is a legal agreement made between 2 or more partners, that describes the amount of work and type of work and the amount to be paid. There is often a schedule of payments, with payments at each stage of a job as it is completed. For example, in building a house you may get paid when walls are up, roof is up, shingles, siding, windows, etc.

With a contract you get paid the same amount regardless of how many hours the job takes. What might be a situation where a contract would be better then being paid by the hour?

To win a contract, tradespeople may provide an estimate or bid and the client selects the winning bid. A contract between the successful bidder and the client is then negotiated to govern the terms of the job, including price, schedules, and possibly other terms that the parties decided to include.

Self-Employed people often work on a contract basis with their clients, and they may run their own business

In small groups list advantages and disadvantages each way we have looked at to earn money.

Hourly Wage Advantages: set hourly wage, overtime pay Disadvantages: not paid if not there Salary Advantages: set salary for year, paid for sick days, etc. Disadvantages: no overtime pay, no encouragement to excel

Commission Advantages: big money if good Disadvantages: no set salary, may be slow periods, no money if not good Commission/Salary Advantages: safety as back up Disadvantages: lower commission

Piecework Advantages: can make big $ if fast, wage based on performance, clear relationship between output and wage Disadvantages: earn less if slow, quantity emphasized of quality

Self-Employment Advantages: freedom to select jobs, set own hours, take time off whenever, own boss, can work alone Disadvantages: may not have enough clients, no benefits or get paid for holidays, have to look after own bookings and book keeping

Activity 2.3 – Piecework vs. Hourly Wage p. 65 With a partner if you wish work through the activity

Discuss the Ideas – Home Reno p. 65 Read through together and solve

Discuss the Ideas – Custom Work p. 66 Read through together and solve

Example 1

Example Chelsea works as a sales clerk in a clothing store. She earns a base salary of $8.00/h plus a 15% commission on the price before taxes of each item she sells. Her work days is 8 hours. One day, Chelsea sells a suit with a price of $625.00, a sweater priced at $95.00, 3 t- shirts that cost $45.00 each, and a raincoat priced at $225.00. How much does she earn that day?

Example Jared is a painting contractor. He negotiates a contract with a homeowner to paint the exterior siding on a house at a rate of $30.00/h plus the cost of materials. It takes Jared six 8 hour days to prepare and paint the siding, and he uses 15 gallons of paint that cost $45.00 each. What was the total value of the contract?

Mental Example Jordan earns $800.00 a week as an auto body technician. His work week is 40 hours. If he works only 35 hours one week, how much will he get paid?

Building your Skills Ex. 2.2 (p. 69) #1-8

3. Additional Earnings WA10.11 Demonstrate understanding of income including: wages salary contracts commissions

3. Additional Earnings Math on the job p. 72 Most of us are probably familiar with what a bonus is. A bonus is payment that employees receive on top of their regular payment as a reward or incentive. Read through together and solve.

There are other ways though however that you can gain additional earnings on the job. You have probably contributed to some ones additional earnings. Tips area a form of additional income that people in the service industry usually receive. Jobs like pizza delivery people and hairdressers often receive tips for doing a good job

Bonuses which we looked at in Math on the job are a form of additional income that are most often related to the job performances. For example, employers may pay bonuses to staff who exceeds sales targets or sign up new customers.

Some jobs also have shift premiums, especially when they work non-standard hours. This may also include a job that some regular hours and some irregular hours. For example, when a maintenance worker at a hospital you will have a salary but also receive money on top of that when you are on call and also when you get called into work outside of your regular hours.

Danger Pay is another form of additional pay that is received by employees that work in a place or a job that endangers their life. An example would be a reporter that was sent over to Iraq to cover the war.

Isolation Pay is added to salaries of people working in remote, inaccessible area. Rig workers that work on a rig in remote areas in Northern Saskatchewan or the NWT’s receive this additional income.

Activity 2.4 – Babysitting Service p. 73 Work through together with a partner if you wish.

Discuss the Ideas – Earning Tips p. 74 Read through together and solve

Example Kyle works in a bookstore selling books. He also sells customers reward cards for $30.00 that will give them a discount on future purchases. His employer gives him a bonus of 10% of the amount received if he sells more than 20 cards in a month. If his regular wages are $1883.77 and he sells 27 reward cards one month, what will Kyle’s wages be including the bonus?

Example 2

Why do you think the percentage of regular rate earnings is different from the percentage of regular hours worked? The hours are all in the same units while the rate of pay for each type of hours worked is different

Building your Skills Ex. 2.3 (p. 76) #1-8

4. Calculating Net Pay WA10.11 Demonstrate understanding of income including: gross pay net pay.

4. Calculating Net Pay Math on the Job p. 79 Read through together and solve

Through out the unit we have been calculating and working with gross pay however gross pay is not the amount of money you as an employee get to take home. The amount of money you get to take home is called you Net Pay.

Net Pay refers to the amount of income left after certain deductions have been made by your employer. Look at the pay statement on p. 79. What categories of deductions are made from gross pay?

The categories of deductions are before tax deductions and taxes.

Note: CPP and EI are under taxes, although technically CPP is a contribution rate and EI is a Premium CPP is matched by the government and can’t be taken out till you retire EI is put in and can be taken out when you are unemployed

Based on the pay statement, what % if Harmionie’s gross pay does she pay in union dues and what % goes into pension?

Do you think that deductions are the same for everyone? Why or why not? Deductions will vary from person to person. Every tax payer can claim a basic personal exemption (amount of money that can not be taxed), but you may also be eligible for other exemptions that reduce the income tax you pay. People in college for example can claim an exception for their tuition.

Look at the pay statement Look at the pay statement. What do CPP and EI stand for and why do working Canadians contribute to these plans? CPP – Canadian Pension Plan EI – Employment Insurance Canadians pay into these plans to protect them when they no longer can work. EI supplies you with money when you become unemployed and CPP supplies you with money when you retire

The Federal and Provincial deductions on the pay statement are income tax payments. The amount of income tax you pay varies according to your personal circumstances and the province/territories in which you live.

When you begin a new job your employer requires you to complete a TD1 form (Personal Tax Return) to determine the amount of income tax you should pay. From your TD1 exception claims, you determine your claim code, which your employer uses to calculate your tax deductions

Most people (and what we will use) are only able to claim the basic personal amount, which is TD1 claim code 1.

In addition to paying taxes, people pay amounts from their gross pay for a range of benefits and programs such as: Health care plan Long-term disability Dental plan Union dues Pension Plan Life insurance Savings Plans

These are taken from gross pay before taxes are determined.

What are some pros and cons of having deductions like these being taken directly from your paycheque?

Pros You are “forced” to save money by contributing to pensions You can use the benefits like the dental plan whenever you need it Union dues offer job security and bargaining power Cons Reduces the amount of money that you get to take home

When all deductions have been made, the amount remaining – the net pay – is paid to the employer.

Discuss the Ideas – Life Style Benefits p. 80 Read through together and solve

To Calculate CPP contributions we do the following steps: Find the basic pay period exception. To do this we take the yearly exception ($3500) and divide it by the number of pay periods in a year. Subtract the result from step one from the gross pay. Multiply the result from step 2 by the current years CPP contribution rate (4.95%). The result will be your CPP deduction that will be taken from your paycheque.

Example You need to calculate the CPP deduction for Amanda. In 2013, the CPP rate was 4.95% of any gross earnings above $3500.00.

To calculate the EI premium that will be deducted from your paycheck you simply multiply your gross pay by the EI premium rate which is 1.73%.

Example Referring to Amanda’s pay statement, calculate the EI premium that will be deducted from her weekly pay.

To calculate the Income Tax that will be deducted from your gross pay we need to look it up using the employees TD1 code, the number of pay periods that the employee has in a year and the amount of the gross income for that pay period. We will look it up using the following website: http://www.cra- arc.gc.ca/tx/bsnss/tpcs/pyrll/t4032/jn10/menu- eng.html

a) Calculate the amount of income tax to deduct from Amanda’s paycheque. Her TD1 claim code is 1, and she live is Alberta. b) Fill in all the deductions that will be entered on her pay statement c) Calculate her net pay.

Mental Example You know that all your deductions add up to approximately 38% of your gross pay and you earn $950.00 a week. Estimate what your net pay will be.

Activity 2.6 – Comparing Deductions p.84 We will work through this together

Example Some benefit deductions are not taxable. For example, union dues and pension contributions are not taxable. In the pay stub, what is the person’s taxable income? How much income tax will he or she pay? Calculate all the deductions that this person would have taken from their paycheque and calculate the net pay. Assume the TD1 claim code is 1, and the province is Saskatchewan.

Building your Skills Ex. 2.4 (p. 87) #1-8