1. Chapter 6 Pay, Benefits, and Working Conditions
MYPF Chapter 06
11-Sept-2001
Chapter 6 Pay, Benefits, and Working Conditions
Understanding Pay, Benefits, and Incentives
Compute payroll deductions and net pay.
Identify optional and required employee benefits and recognize their value.
Work Arrangements and Organizations

2. Gross Pay, Deductions, and Net Pay
(wages/salary before taxes)
Gross Pay
Hourly wages
Overtime
Salary
Commission
Minus Deductions
= Net pay
Self-employed Individuals
Pay equal to company profits
Estimate taxes & pay quarterly
— Deductions
Net pay (paycheck)

3. Calculating Gross Pay
Hourly pay = Hours worked during pay period x pay rate
Overtime Pay = pay rate x OT hours x 1.5
Annual Salary divided by # of pay periods = Gross Pay
Commission salary = Sales achieved x Commission percent
© South-Western Educational Publishing

4. Your Paycheck Deductions are subtracted from your gross pay
Your Pay Period may be
Weekly (52 pay period in a year)
Bi-weekly (26 pay period in a year)
Bi-monthly (24 pay period in a year)
Monthly (12 pay period in a year)
Deductions are subtracted from your gross pay
Required deductions:
Withholding Income taxes (Federal & Possibly State) vary by income and state
Social Security taxes 6.2% (employers match)
Medicare Taxes 1.45%
Optional deductions:
Health, Dental, Vision Insurance
Donations
Savings plans (401K)
Net pay (Take-home pay) is the amount of your paycheck.

5. Benefits and Incentives
Profit sharing
Paid vacations and holidays
Employee services
Child care
Sick pay
Leaves of absence
Insurance
Bonuses and stock options
Pension and savings plans
Travel expenses
Product discounts

6. Employer Insurance Benefits
Health insurance-portion paid by employee through deductibles
Life insurance-employer may pay a standard coverage additional benefit amounts would be employee paid.
Dental insurance-portion paid by employee through deductibles
Vision insurance-portion paid by employee through deductibles

7. Flexible Work Arrangements
Altered workweeks
Flextime-employee chooses their daily hours
Compressed workweek-40 hr work week in less than 5 days
Job rotation-rotate from one task to another during scheduled day or week
Job sharing-2 people share 1 full-time position
Permanent part-time-work less than 32 hrs a week
Telecommuting-working from home or non-office space

8. Labor Unions and Professional Organizations
May be a requirement of employment to be member of a Labor Union or Professional Organization
Labor Unions-group of people who work in similar occupations, organized for the benefit of all employees in these occupations paid through union dues.
Purpose-protect the rights of workers
Functions of unions
Recruit new members
Collective bargaining-salaries, benefits and working conditions
Support political candidates who favor unions
Provide support and services
Types of unions
Craft unions (bricklayers, carpenters)
Industrial unions (skilled/unskilled in a particular place:AFL-CIO)
Public-employee unions (teachers, firefighters, police)

9. Professional organizations
Organizations that support particular occupations that require considerable training and specialized skills.
Dues are collected as requirement of membership
Examples
American Bar Association-lawyers
American Medical Association-doctors
National Education Association-teachers
Purpose
Establish and maintain professional standards
Publication keep professionals up-to-date in their field
Lobby for Political Action for their profession