# Chapter 2: Earning an Income

```CHAPTER 2:
EARNING AN
INCOME
Math 10-3
INTRODUCTION, VOCABULARY, WAGES
AND SALARIES
Who has had a job before?
 How did you get paid?
 Did you get paid overtime?
 How did they determine how many hours they
worked?
 Did they have any deductions? Etc.

IN ALBERTA, THE CURRENT MINIMUM WAGE IS
\$9.40 PER HOUR.



Minimum wage is the minimum amount a
worker MUST be paid an hour, as set out by the
Provincial Government.
The minimum wage in BC is \$8.75/hour. The
minimum wage in Sask. is \$9.50. The min. wage
in Ontario is \$10.25/hour.
why there might be differences in minimum wage
WHAT IS THE DIFFERENCE BETWEEN A SALARY
AND A WAGE?



Salary – paid a fixed amount every pay period.
This amount is determined usually in a contract
which is signed before employment starts.
Advantages – paid the same amount every pay
period, regardless of hours worked/holidays etc.
Disadvantage – not paid for any extra work you
might do.



Wage – paid a fixed amount PER HOUR worked
during a certain pay period.
Advantages – paid for any extra hours you might
work. Usually paid more per hour during certain
times (for example, working on holidays,
Sundays, evenings etc.)
Disadvantages – if you don’t work, you don’t get
paid (for example, if you miss a day of work, or
you work fewer hours in a week than normal).

Gross Pay – the total amount of money earned
in a pay period. AKA gross earnings. This is the
amount you make BEFORE deductions.
A PAY STATEMENT IS A FORM AN
EMPLOYER WILL GIVE YOU THAT SHOWS
EARNINGS FOR A DEFINED PAY PERIOD.
A pay period could be weekly, bi-weekly,
monthly, etc.
 *weekly – once a week (paid 52 times per year)
 *bi-weekly – every two weeks (paid 26
times/year)
 *monthly – once a month (paid 12 times/year)
 *semi-monthly – twice a month (paid 24
times/year)
 *annually – one year (paid once a year)

*HOW DO WE DETERMINE THE MONTHLY, SEMIMONTHLY, BI-WEEKLY AND WEEKLY PAY FOR A
SALARY?*
Ex. Brendan works at the Edmonton Journal. His
annual salary is \$35 650.
 Determine the following scenarios:
If Brendan is paid monthly, how much will he make
gross monthly?
 12 pay periods per year: \$35 650 / 12 = \$2 970.83 /
month
 Paid Semi-Monthly?
 24 pay periods per year : \$35 650 / 24 = \$1 485.42
twice a month

Paid Bi-Weekly?
 26 pay periods per year: \$35 650/26 = \$1 371.15
every two weeks

Paid Weekly?
 52 pay period per year: \$35 650/52 = \$685.58

*HOW DO WE DETERMINE THE GROSS PAY
FOR WAGES?


EX: Morgan makes minimum wage. He works 35
hours one week. How much will his gross pay be for
that week?
*Multiply the number of hours worked by the wage
to get gross pay!*

35 hours x \$9.40/hour = \$329.00

*Always round MONEY to two decimal places!!!*
Employee Name: Christine
Thomas
Company:
McDonalds

Pay Period
Begin:
09/18/2010
Pay Period
End: 09/24/2010

GENERAL
Employee ID:
555777
Job Title:
Cashier
Kingfisher Blvd
Pay Rate: 9.25/h
HOURS AND EARNINGS

Descri
ption
Rate
Regular 9.25/h
Hours
Gross
Earnin
gs
25
\$231.25
How often does Christine
get paid? Weekly (24-18
= 6 days = 1 week)
If Christine gets paid the
same amount every week,
how much will she make
gross in a month?
\$231.25 x 4
weeks/month = \$925.00
How much will she make
in a year? \$925.00 x 12
months/year = \$11 100
Employee Name: Robert Cooper
Employer:
ATCO Gas
PP Begin:
09/4/2010

PP End:
09/17/2010
Employee ID:
1234
Job
Description:
Technician

Pay Rate: 15.45/h *determine
using gross earnings and hours
worked
Descri
ption
Rate
Hours
Gross
Earnin
gs
Regular 15.45/h
32
540.75
Sunday
(rate +
1.00)
8
131.60
Total Gross Earnings
672.05
16.45/h

How often does Rob get
paid? Bi-Weekly (17 -4
= 13 days = 2 weeks)
If Rob gets paid the
same amount every pay
period, how much will
he make in a month?
2 x 672.05 = \$1 344.10
If Rob gets paid the
same amount every
month, how much will
he make gross per year?
12 x 1 344.10 = \$16
129.20
ASSIGNMENT: SALARIES AND WAGES.DOC
DAY 2: HOURS WORKED –
COMPLETING TIME CARDS
HANDOUT:
ALBERTA.EMPLOYMENT.STANDARDS
FULL TIME VS PART TIME



Full Time – usually considered to be between
35- 44 hours per week. Typically, full time
results in 8 hour shifts per day, 5 days a week.
Part Time - usually considered to be less than
35 hours a week. Typically, part time results in
shifts less than 8 hours OR fewer days are
worked per week.
Shift – the amount of time you work.
GETTING PAID WITH A WAGE – HOW ARE
THE HOURS YOU WORK TRACKED?

Punch cards – at the start and end of every shift, you
insert a card into a machine that will record the date
and time. This card is then later used to calculate the
number of hours worked during a pay period.
Time Card (Personal) - you may have to manually
record the time you start and end each shift. Sometimes
this is called “logged hours”.
 Time Card (Pay Roll) – you may work for a company
where a person logs your hours for you. It will be your
responsibility to inform them of any extra hours you
work, or any shifts you miss.

24 HOUR TIME – MOST JOBS WILL USE 24
HOUR (INSTEAD OF 12 HOUR) TIME. TO
DETERMINE THE TIME, SUBTRACT 12.

Remember, in 12 hour time, the morning is am,
and the afternoon/evening is pm
Ex. What time is 13:05? 13-12 = 1:05 pm
 What time is 22:45? 22-12 = 10:45 pm
 What time is 02:50? = 2:50 am

HOW DO WE DETERMINE THE NUMBER OF
HOURS WORKED?

For example, you work from 9:30 – 14:50. How many
hours have you worked?
1st add minutes to the start time to match the
minutes of the end time
 9:30 + 20 minutes = 9:50



2nd subtract the hours: 14 – 9 = 5 hours
3rd combine hours and minutes = 5 hours + 20
minutes.


Employers don’t usually pay for every minute of
work. Typically you will get paid for every
quarter hour you work. Round to the nearest
quarter (0, 15, 30, 45)
20 minutes – closest to 15 minutes.
What part of an hour is 15 minutes?
 x/1 = 15/60 = 0.25

4th Add hours and parts of an hour together:
5 + 0.25 = 5.25 hours.

EX: COMPLETE THE FOLLOWING TIME CARD:
TIME CARD – Telus Communications
Employee Number: 5872
Approval:
Employee Name: Bill Ngo
For Week Ending: 19/11/10
Date
Start (IN)
End (OUT)
Total Hours
15/11/10
09:03
12:05
3 hours, 2minutes = 3 hours
16/11/10
16:02
21:06
5hrs, 4 mins, = 5 hours
17/11/10
08:58
12:00
3 hrs, 2 mins = 3hours
18/11/10
16:30
22:01
5 hrs, 31 mins = 5 hours and 30 minutes = 5.5 hours
19/11/10
08:32
12:00
3 hours, 28 mins = 3 hrs 30 mins = 3.5 hours
Total Hours Worked during P.P. 20 hours
IF BILL MAKES \$10.25 PER HOUR, HOW MUCH
WILL HE MAKE GROSS FOR THIS PAY PERIOD?

20 x 10.25 = \$205
DAY 3: OTHER WAYS TO EARN –
PIECEWORK AND COMMISSION
SALARY AND WAGE AREN’T THE ONLY WAYS TO
EARN AN INCOME. OTHER WAYS INCLUDE:




Self employment – a person who works for
themselves rather than for an employer.
Piecework – when someone is paid a set rate for an
amount produced
Commission – an amount (usually a percentage)
paid to someone for a business transaction
Contract – a legal agreement that outlines terms,
conditions and payments for work to be done

Brainstorm as a class examples of occupations for
each vocabulary words above. Also, brainstorm
employed.
PIECEWORK

Ex. Michelle is an
Artisan – a craftsperson
who specializes in
decorative arts. She
makes pottery bowls.
She sells large bowls for
\$45.00 and medium
bowls for \$35.00. One
weekend at a farmers
market she sells 11
medium and 8 large
bowls. How much does
she make?

*Multiply price by
totals together*
\$45 x 8 = \$360
\$35 x 11 = \$365
Total: \$745
COMMISSION
REVIEW: PERCENT MEANS OUT OF 100! TO FIND THE
PERCENT OF NUMBERS, CHANGE THE PERCENT TO A
DECIMAL, AND THEN MULTIPLY THIS DECIMAL BY THE
NUMBER IN QUESTION.

Ex. Lindsay works at
a car dealership. She
gets 3% commission
on all sales. Last
month she sold a total
of \$44 375. How much
will her gross
earnings be?
1st change % to a
decimal
 3% = 3/100 = 0.03

2nd multiply decimal
by total sales
 0.03 x 44 375 = \$1
331.25


Ex. Dan works as a
real estate agent. He
gets 0.2 % commission
on the sale price of
any house he sells.
Last month he sold 2
houses: \$299 450, and
\$380 200. How much
will his gross earnings
be?
 299 450 + 380 200 = \$
679 650
 2nd change % to a
decimal
 0.2% = 0.2/100 = 0.002
 3rd multiply decimal
by his sales.
 0.002 x 679 650 = \$1
359.30


Ex. Carl works at The
Keg restaurant. He
makes \$8.80/h plus he
gets to keep 75% of his
tips. If one week he
works 36 hours and
makes \$155 in tips,
what will his gross
earnings be?






1st find out his hourly
wage amount
\$8.80/h x 36 hours =
\$316.80
2nd change % to a
decimal, and multiply
by his tips
75% = 75/100 = 0.75
0.75 x 155 = \$116.25
tips together to get total
\$316.80 + \$116.25 =
\$433.05
EX. ANDREW STARTS A NEW JOB SELLING
APPLE COMPUTERS. THE COMPANY OFFERS
HIM THE FOLLOWING PAY OPTIONS:
Base salary of \$500
plus 2% of all sales
 Straight commission
of 6%
 Determine Andrew’s
gross earnings for
both options based on
the following sales:

Amount
Option 1
Option 2
Gross
Earnings
Gross
Earnings
\$0
\$500
\$0
\$5000
\$600
\$300
\$10 000
\$700
\$600
\$15 000
\$800
\$900
\$20 000
\$900
\$1 200


When is option 1 a
better choice?
When is option 2 a
better choice?

Which would you
choose?
DAY 4:EXTRA PAY: OVERTIME,
VACATION, BONUS
HANDOUT ALBERTA.STANDARDS.OVERTIME
TO STUDENTS.
OVERTIME INCOME CAN BE CALCULATED
EASILY.



1st Determine the number of over time hours
worked
2nd multiply this by the overtime rate (time-anda-half = x 1.5, double time = x 2) and current
wage.
3rd add overtime to regular work hours.

Ex. Rebecca in one
week works 40 hours,
plus 8 hours over
time. She makes
\$9.25/hr plus time and
a half for overtime.
How much will she
make gross?



Regular Pay: 40 x
9.25/hr = \$370
Overtime Pay: 8 x 1.5
x 9.25 = \$111
Total Gross: 370 + 111
= \$481

If you have a service industry job (retail,
restaurant, fast food, etc.) you will likely have to
will likely get paid at least time-and-a-half for all
hours worked on a holiday.

Ex. Trent works at
Safeway. On
Thanksgiving Monday
he works 5 hours,
Tuesday 8 hours,
Thursday 6 hours and
Friday 4 hours. If
Trent makes \$8.95/h
regular, how much
will his gross pay be
for the week?



Regular: 8 + 6 + 4 = 18
hours x 8.95/hr =
\$161.10
Holiday Monday = 5
hours x 1.5 x 8.95/hr =
\$67.13
Gross Pay: 161.10 +
67.13 = \$228.23

Some service industry jobs will give you “vacation
pay” instead of paid vacation time; this will likely
be a percentage of your yearly gross pay that will
work out to be the same as two weeks of pay.
This will be either paid out to you in a lump sum
annually or on every pay check. If you take time
off, you will not be paid while you are away.

Ex. Sarah gets vacation pay as
4% of her gross income paid
annually in January. If she
makes \$10.50/hr for a 35 hour
work week, how much will she
make vacation pay?









1st determine her weekly gross
pay:
10.50/hr x 35 = \$367.50
2nd determine her annual gross
pay
\$367.50 x 52 weeks/year = \$19
110
3rd find her vacation pay
*remember to change the % to
a decimal!
4% = 4/100 = 0.04
0.04 x 19 110 = \$764.40
If Sarah gets her vacation pay
every pay period, how much
will this be?
764.40 / 52 weeks/year = \$14.70
per weekly pay period
ASSIGNMENT: OVERTIME AND
HOLIDAYPAY.DOC
DAY 5: DEDUCTIONS- UNION
DUES, HEALTH PLANS,
CHARITABLE DEDUCTIONS ETC.
Gross Income/Pay – income earned before
deductions
 Net Income/Pay – Income received after

Before taxes are calculated on gross pay, there
are certain “before-tax” or “tax exempt”
deductions.
 These include:
 Union dues, RRSP (registered retirement savings
plan), charitable donations and pension


Ex. Lilly works as a
receptionist. She makes
\$650 a week. Her union
dues are \$14.10 per pay
check. What percent of
Lilly’s gross pay does she
pay in union dues?






1st determine here gross
annual income: \$650 /
week x 52 weeks = \$33 800
2nd determine her annual
union dues \$14.10 / week x
52 weeks = \$733.20
3rd determine the % of her
annual gross income that
she pays for union dues:
*remember, percent is part
of a whole*
\$733.20/\$33 800 =
0.0216…
0.0216… x 100 = 2.2% of
her gross income is spent
on union dues.


In addition to these deductions, many people pay
amounts from their gross pay for a wide range of
benefits and programs such as dental plans
and savings plans.
Many employers also offer lifestyle benefits.
Such as discounts on merchandise, services, or
bonus items like movie tickets etc.

Marmot Basin example

Ex. You have a 16-week contract at Marmot
Basin in Jasper, where you will be working
between 15 hours a week. Your employer offers
you a choice of
\$10.75/hr
or
 \$8.80/hr plus a weekday season pass that has a
value of \$680.

How many hours total
will you work during
the 16-week contract?
 16 week x 15 hours
/week = 240 hours

How much will you
make for the first
choice?
 \$10.75/hr x 240 hrs =
\$2 580



How much will you
make for the second
choice?
\$8.80/hr x 240 hrs =
\$2 112 PLUS a \$680
season pass.

Which would you
choose? Why?
Employee
Lilo StitchTHE
EX2. Name:
CONSIDER
FOLLOWING PAY
Company:
STATEMENT
Pay Period Begin: 09/24/2010
Pay Period End: 10/01/2010
West 49
Employee ID: 6262
Job Title: Sales Associate
Pay Rate: 10.50/h
Description
Rate
Hours
Regular
10.50/h
30
Before Tax Deductions
Amount
Union Dues
9.75
RRSP
20.50
TOTAL BEFORE TAX DEUDCTIONS:
Benefits
Amount
Extended Health Care
15.10
Dental
9.70
TOTAL BENEFIT DEDUCTIONS:
TOTAL DEDUCTIONS:
NET PAY:
DAY 7: CPP, EI AND INCOME
TAX


* Remember: Taxable Income – Your income,
AFTER DEDUCTIONS is taxed by both the
federal and provincial governments.
*NOTE: Taxable income is GROSS INCOME
minus any tax exempt deductions such as
pension, RRSP, union dues etc.


Canada Pension Plan (CPP) – Provides
income for workers after they retire. Every
employee between 18-65 must pay into it.
To estimate CPP deductions, use 4.95% of
your earnings up to a max. deduction of
\$2,163.15


Employment Insurance (EI) – A fund that
employees pay into to insure themselves against
being unemployed. To estimate, use 1.73% of
your earnings (up to earnings of \$43 200). Your
employer usually pays 1.4 times your
contribution into the fund.
THE MAXIMUM contribution amount for the
employee is \$747.36
THE FEDERAL GOVERNMENT TAXES YOUR
INCOME AT DIFFERENT RATES:
Taxable Income (\$)
0 to 31 677.00
Federal Tax Rate
16%
31 677.01 to 63 354.00
22%
63 354.01 to 103 000.00 26%

Provincial tax rates vary from province to
province…. Alberta is currently 10%
Go through the following example with the students
 Ex. Simon earns a biweekly salary of \$1152.
 a.
What is Simon’s gross yearly salary?

Biweekly = 26 times paid per year
 \$1152 x 26 = \$29 952


b. How much will Simon pay in CPP and EI each year?
CPP = 4.95% of gross earnings *change to a
decimal!* 4.95% = 0.0495
 \$29 952 x 0.0495 = \$1 482.62

EI = 1.73% of gross earnings *change to a
decimal!* 1.73% = 0.0173
 \$29 952 x 0.0173 = \$518.17




d.
How much Federal tax does Simon pay?
\$29 952 Simon is in the first range (16%)
*change to a decimal!* = 0.16
\$29 952 x 0.16 = \$4 792.32

e.
How much provincial tax does Simon pay?
Alberta Income Tax rate is 10% *change to a
decimal!* = 0.10
 \$29 952 x 0.10 = \$2 995.20



f.
Determine Simon’s total year deductions
\$1 482.62+ \$518.17 + \$4 792.32+ \$2 995.20= \$9
788.31

g.
How much does Simon earn a year net?

\$29 952 - \$9 788.31 = \$20 163.69

h.
What is Simon’s biweekly take home pay?
*biweekly = 26 times paid per year!*
 \$20 163.69 / 26 = \$775.53

DAY 8: SELF EMPLOYMENT


Graphs are a visual way to represent data.
A circle graph is divided into pieces to represent
part of 100%. An entire circle graph should add
up to 100%.







For example:
50% of people prefer coke
25% prefer Pepsi
15% prefer sprite
And 10% prefer Root
Beer.
Draw a graph to represent
this 
*Notice that &frac12; of the
circle is represented by
coke (50%!)
IF YOU POLLED 325 PEOPLE, HOW MANY
WOULD YOU EXPECT TO PREFER COKE?


50% = 0.50
325 x 0.50 = 162.5 people
SO about 162 people (we cannot have half a
person!)
A BAR GRAPH REPRESENTS DATA WITH BARS:


About how many students take the bus in 5th
grade? Go to the top of the 5th grade bar, and look
to the left  about 80 students.
To construct a bar graph, create an appropriate
scale on the left-hand side (the up and down or Yaxis) and a scale on the bottom (the left to right
or X-axis).
ASSIGNMENT:
SELFEMPLOYMENTPROJECT.DOC
```