Chapter 1
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Employee: those who work for others
Employer: the person or company an
employee works for.
Hourly rate: a certain amount of money paid
for each hour worked.
Gross pay: total amount of money that an
employee is paid. Also called gross wages,
total earnings or total pay.
◦ Gross pay= Number of hours worked x hourly rate
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A:
◦ G= 46 x $7.50
◦ G= $345
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B:
◦ G= 25 x $16.25
◦ G= $406.25
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C:
◦ 5x8=40 hours
◦ G= 40 x $18.75
◦ G= $750
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D:
◦ 8+6+7+6+5=32
◦ G=32 x $9
◦ G=$288
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Overtime: time worked beyond the regular
working day or week.
◦ Regular working day: based on an 8 hour day
◦ Regular work week: based on 40 hours
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Time-and-a-half: overtime pay that is
calculated by multiplying regular rate by
time-and-a-half (1.5).
◦ 1.5 x regular pay rate (do NOT round)
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Double-time pay: earning twice your regulartime pay rate for working OT or
weekends/holidays.
◦ 2 x regular pay rate (do NOT round)
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E:
◦ $7.51
 1.5 x $7.51=$11.265
 2 x $7.51=$15.02
◦ $8.76
 1.5 x $8.76=$13.14
 2 x $8.76=$17.52
◦ $13.67
 1.5 x $13.67=$20.505
 2 x $13.67=$27.34
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F:
◦ 1.5 x $11.25= $16.875
◦ 2 x $11.25= $22.50
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G:
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M-9.75, T-8, W-6, TR-8.5, F-8
Regular hours: 8+8+6+8+8=38
OT hours: 1.75+.5=2.25 hours
Regular pay: 38 x $13.69 =$520.22
OT pay rate:
 1.5 x $13.69=$20.535
◦ OT pay: 2.25 x $20.535=$46.20
◦ Gross pay: $520.22+$46.20=$566.42
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H:
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45.3+8.1=53.4 hours worked
Regular hours: 40
OT hours: 13.4
Regular pay: 40 x $17.50=$700
OT pay rate: 1.5 x $17.50=$26.25
OT pay: 13.4 x $26.25= $351.75
Gross pay: $700+$351.75= $1051.75
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Salary: a fixed amount of money for each pay
period worked.
◦ Get paid the same regardless of how many hours
they worked.
◦ They don’t get paid OT even if they work more than
40 hours a week.
◦ They get paid the same even if they are absent from
work if approved by employer.
◦ Typically earn more money than hourly employees,
have more education and skills required.
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Commission
◦ Some salespeople earn a commission instead of a
fixed salary or hourly pay.
◦ May be an amount for each item sold, or it may ne a
percent of the dollar value of sales.
◦ Sometimes a salary + commission may be earned.
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Straight commission
◦ Salespeople who earn money only when they sell
stuff.
Commission = quantity sold x rate of commission
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When the rate of commission is a percent,
multiply the amount of sales by the rate to
find the commission.
Commission=sales x rate of commission
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Quota: a fixed amount of sales that a person
may be required to meet before receiving a
commission.
Graduated commission: a salesperson’s rate
of commission increases as their sales
increase.
Rate of Commission:
◦ Rate of commission=amount of commission/sales
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Piece-rate: when employees are paid for each
item or “piece” they produce.
◦ Gross pay=# of pieces produced X piece rate
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Per diem: when employees are paid a fixed
daily amount.
◦ These are usually temporary employees provided by
temporary help agencies
Gross pay= # of days worked X per diem rate
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Tip: an amount of money given to someone
for services they provide.
◦ They are typically paid less than minimum wage.
◦ Tip amount= total bill X tip percent
◦ Tip amount = # of units x tip per unit