1. Commissions, Royalties, & Piecework Pay
Section 6-3

2. Pay Plans Last week, we covered:
Annual Salary – paid by the year
Hourly Pay – paid by the hour
What other types of pay plans are there?
Commission
Paid according to money from sales
Royalty
Paid according to money from sales (you are not seller)
Piecework Pay
Paid according to units produced

3. Commission Some jobs that get paid commission: Real Estate Agent
Salesmen for department stores
TV – Sales
Any type of sales job

4. Royalties Some jobs that pay royalties Author Movie Director
Actor/Actress
Musician

5. Piecework Pay Jobs that have piecework pay plans: Newspaper delivery
Field workers (pick corn, strawberries, etc)
Factory workers

6. Advantages vs. Disadvantages
As an employee, what are the advantages of being paid commission or piecework?
What are the disadvantages?
As an employer, what are the advantages of being paid commission or piecework?

7. Calculating Commission
Huey Gaines is paid a straight commission of 6% on his sales. During February, his sales were $38,000. What was his commission?
Find his commission rate:
Convert the percent to a decimal:
Multiply the decimal by the amount of sales: 6%
0.06
0.06 x 38,000
= $2,280

8. Calculating Commission
Melvin’s sales last month of a new tile cleaner were $9,500. If he receives a commission rate of 15% of all sales, what commission did he earn?
Find his commission rate:
Convert the percent to a decimal:
Multiply the decimal by the amount of sales:
15%
0.15
0.15 x 9,500
= $1,425

9. Calculating Commission
Jacqueline earned 15% commission on her monthly sales of $2,870, $3,150, and $3,940. What was her total commission for all three months.
First Month:
Second Month:
Third Month:
0.15 x 2,870
= $430.50
0.15 x 3,150
= $472.50
0.15 x 3,940
= $591
Total Commission:
= $1,494

10. Calculating Commission
Liz receives a weekly salary of $200, plus 3% commission on her sales. Last week, she sold $29,700 of computer equipment. How much did she earn?
Earnings = Commission + weekly Salary
Commission =
Weekly Salary =
Earnings =
0.03 x 29,700
= $891
= $200
= $891 + $200
= $1,091.00