1. Pay, Benefits, and Incentives
Chapter 6

2. Job
When you take a job, you agree to perform certain tasks in exchange for regular pay.
The amount you earn BEFORE deductions are taken out is called GROSS PAY.

3. Gross Pay Hrs. worked x Hourly Wage 40 hrs x $7.75= $310.00
Established payment amount
Standard 40 hour workweek
Hrs. worked x Hourly Wage
40 hrs x $7.75= $310.00

4. Overtime Working beyond regular hrs.
Established by Fair Labor Standards Act (1 ½ regular pay)
Example: worked 45 hrs $7.75/hr.
40 hrs. x $ = $310.00
5 hrs. x $11.63 = $58.15
Gross Pay $368.15

5. Salary Calculations Annual Decided Amount
Determined at Beginning of Contract or Job
To calculate monthly
$24,000/12 mo. = $2,000/mo.
To calculate salary from monthly
$2,000 x 12 mo = $24,000/yr.

6. Deductions Amounts Subtracted from Gross Pay
Standard Deductions (not optional)
Social Security
Federal Income Taxes
State Income Taxes
Additional Deductions
401K
Medical Insurance
Savings

7. Net Pay Amount left after all deductions have been taken out.
Also known as “Take Home Pay”
The amount of money your check is for.

8. Your Check Gross Pay (salary/wage) Net Pay “Take Home Pay”
-Deductions (insurance, etc.)
Net Pay
“Take Home Pay”

9. Benefits & Incentives

10. Benefits Example of Benefits Health Insurance Worker’s Compensation
Many employers offer benefits, which are forms of compensation in addition to being paid money.
Example of Benefits
Health Insurance
Worker’s Compensation
Dental/Vision Insurance
Sick Leave
Vacation days

11. Other Types of Benefits and Incentives
Profit Sharing
portion of profits
Paid Holidays
7/4, 12/25, 1/1
Employee Services
Discounts
Leave of Absence
Bonuses
Monetary
Stock Options
Travel
Trip expenses
Pensions

12. Retirement
When an employee retires, he or she receives a monthly check.
Employees are fully VESTED (entitled to the full retirement account) after a specified period of time.