© 2014 Cengage Learning. All Rights Reserved. Do Now: ●How should full-time and part-time employees be paid differently by a business? ●Think about who, what, when, where, why, and how in your answers… SLIDE 1

© 2014 Cengage Learning. All Rights Reserved. Article ●Read the following article ●Summarize each of the four steps mentioned ●Also write down any terms you are unfamiliar with from the article so we can find clarification as a class SLIDE 2

© 2014 Cengage Learning. All Rights Reserved. Let’s Define… ●Research the definition of the terms assigned to your name. Also provide an example for each term to support your definition. ●Dylan: wage, social security tax, employee earnings record ●Jess: salary, Medicare tax, voucher check ●Alex: total earnings, accumulated earnings ●Sreenija: pay period, tax base ●Liam: payroll, qualified retirement plan ●Remy: payroll clerk, 401(k) ●Nick: time clock, individual retirement account (IRA), direct deposit ●Vam: payroll taxes, Roth individual retirement account (Roth IRA) ●Evan: withholding allowance, payroll register ●Bhargav: payroll deduction, net pay ●Then create an attractive display of your words and their definitions to hang up around the room SLIDE 3

© 2014 Cengage Learning. All Rights Reserved. Paying Employees ●The amount paid to an employee for every hour worked is called a wage. ●Federal wage and hour laws require hourly employees to be paid by the hour ●A fixed annual sum of money divided among equal pay periods is called a salary. ●Primarily for full-time employees, owners, and managers SLIDE 4 Lesson 12-1 LO1

© 2014 Cengage Learning. All Rights Reserved. Paying Employees ●A commission is a method of paying an employee based on the amount of sales the employee generates. ●Percentage of employee’s sales ●The total amount paid by a business for an employee’s work, earned by a wage, salary, or commission, is called total earnings. ●Total earnings are sometimes referred to as gross pay, gross wages, or gross earnings. SLIDE 5 Lesson 12-1 LO1

© 2014 Cengage Learning. All Rights Reserved. Paying Employees ●A pay period is the number of days or weeks of work covered by an employee’s paycheck. ●Examples of pay periods ●Every week (weekly) ●Every two weeks (biweekly) ●Twice a month (semimonthly) ●Once a month (monthly) SLIDE 6 LO1 Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Paying Employees ●The total amount earned by all employees for a pay period is called a payroll. ●Uses records to inform employees of annual earnings and to prepare payroll reports for governments ●The accounting staff position that compiles and computes payroll data and then prepares, journalizes, and posts payroll transactions is called a payroll clerk. SLIDE 7 LO1 Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Calculating Employee Hours Worked ●A time clock is a device used to record the dates and times of each employee’s arrivals and departures. SLIDE 8 LO1 Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Calculating Employee Hours Worked SLIDE 9 LO1 Lesson 12-1 Calculate regular hours. 1 1 Calculate overtime hours. 2 2 Calculate total hours. 3 3 Today’s time clocks feed data directly into company’s computer system. System can print report showing daily regular and overtime hours worked by employees at end of every pay period.

© 2014 Cengage Learning. All Rights Reserved. Time Clock Systems SLIDE 10 LO1 Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Calculating Hourly Employee Total Earnings ●Fair Labor Standards Act – sets minimum wage rules for payment of overtime ●Requires businesses involved in interstate commerce pay employees at least 1.5 times normal hourly rate for work done in excess of 40 hours SLIDE 11 LO2 Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Calculating Hourly Employee Total Earnings SLIDE 12 LO2 Lesson Calculate regular earnings 2 2 Calculate the overtime rate 3 3 Calculate overtime earnings 4 4 Calculate total earnings Regular Hours×Regular Rate=Regular Earnings 88×$15.00=$1, Regular Rate×1½=Overtime Rate $15.00×1½=$22.50 Overtime Hours×Overtime Rate=Overtime Earnings 6.5×$22.50=$ Regular Earnings+Overtime Earnings=Total Earnings $1, $146.25=$1,466.25

© 2014 Cengage Learning. All Rights Reserved. Lesson 12-1 Audit Your Understanding 1.What is a payroll? SLIDE 13 ANSWER The total amount earned by all employees for a pay period Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Lesson 12-1 Audit Your Understanding 2.Identify three methods used by modern time clock systems to record employee arrival and departure times. SLIDE 14 ANSWER Employees can swipe their name badges, key in personal identification numbers, or press a finger on a biometric pad to record their arrival or departure. Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Lesson 12-1 Audit Your Understanding 3.Describe the overtime rules of the Fair Labor Standards Act. SLIDE 15 ANSWER This act requires most businesses involved in interstate commerce to pay employees at least 1½ times the normal hourly rate for hours worked in excess of 40 hours per week. Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. Lesson 12-1 Audit Your Understanding 4.How does ThreeGreen calculate overtime earnings? SLIDE 16 ANSWER 1½ times the normal hourly rate for hours worked more than 8 hours per day or 40 hours per week Lesson 12-1

© 2014 Cengage Learning. All Rights Reserved. As a Class… ●Work Together 12-1 ●Then Individually: On-Your-Own 12-1 ●Closure: PadletPadlet SLIDE 17