Chapter 4
Converting
• Fraction to Decimal to Percent
– ½ = .5 = 50% (decimal moves 2 places to right)
• Decimal to Percent to Fraction
– .75 = 75% = ¾ (decimal moves 2 places to right)
• Percent to Fraction to Decimal
– 150% = 1 ½ = 1.5 (decimal moves 2 places to left)
Multiplying & Dividing by a tenth,
hundredth, or thousandth
Multiplying by .1, .01, and .001
• 208 x 0.1 = 20.8 (decimal moves one places to left)
• 83 x 0.01 = .83 (decimal moves two places to left)
• 306 x 0.001 = .306 (decimal moves three places to left)
Dividing by .1, .01, and .001
• 816 / 0.1 = 8,160 (decimal moves one places to right)
• 51 / 0.01 = 5100 (decimal moves two places to right)
• 632 / 0.001 = 632,000 (decimal moves three places to right)
Deductions and Take-Home Pay
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Income Tax
FICA Tax
Insurance
Parking
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Uniforms
Dues
Commuting Costs
Etc.
Deductions & Income Tax
• Income Tax
– Withholding tax
– Withholding allowances
– More allowances
• Pay less
– Less allowances
• Pay more
– Use table
Deductions & FICA Tax
• Federal Insurance Contributions Act 7.65%
• Social Security 6.2%
• Medicare 1.45%
New Rate
Through 2012
Net Earnings Example
packet-problem 3 on p. 65
• Elaine Kaufman works a 40-hour week at $8.75 an hour with
time and half for overtime. Last week she worked 43 hours.
From her earnings, her employer deducted FICA tax at a
rate of 0.0765 and income tax of $32. Her employer also
deducted $33.78 for health insurance and $27.12 for union
dues.
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Regular earnings = 40 * 8.75 = $350.00
Overtime earnings = 3 * (8.75 * 1.5) = $39.38
Total earnings = $350 + $39.38 = $389.38
Deductions = $32 + ($389.38 * .0765) + $33.78 + $27.12 = $122.69
Net earnings = $389.38 - $122.69 = $266.69
More Percent Examples
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67% of $489 = .67 x $489 = $327.63
42 is ___% of 480 = 42 / 480 = .0875 = 8 ¾
20% of $575 = .2 x $575 = $115
1% of $57 = .01 x $57 = $0.57
10% of $89 = .1 x $89 = $8.90
100% of $76 = 1 x $76 = $76
1000% of $87 = 10 x $87 = $870
½% of $870 = ½ x $8.70 = $4.35
1/ % of $255 = .003333 x 255 = $0.85
3
Fringe Benefits
• Fringe benefits are extra payments/benefits received for
working for a company like pension, insurance, free parking,
tuition, uniforms, etc.
• Shari Traxler is paid $9.75 an hour for a 40-hour week. Her
employer also provides these fringe benefits: yearly pension
contributions, $1,622.40; health and accident insurance per
year, $956; free parking, $520 per year; free tuition for evening
classes, $1,200 per year. (a) What is Shari’s annual wage? (b)
What are her total yearly fringe benefits? (c) What are her total
yearly job benefits?
– (a) $9.75 x 40 = $390 (weekly pay) x 52 (weeks per year) = $20,280
– (b) $1,622.40 + $956 + $520 + $1,200 = $4,298.40
– (c) $20,280 + $4,298.40 = $24,578.40
Net Job Benefits
• Job expenses are expenses paid for working for a company like dues,
uniforms, commuting costs, insurance, tools, etc.
• Duane McCoy’s job pays him $11.25 per hour for a 40-hour week. He
estimates his fringe benefits to be 29% of his yearly wages. His yearly job
expenses are estimated to be dues, $375; uniforms, $580; commuting costs,
$934. (a) What is Duane’s total annual pay? (b) What is the amount of
Duane’s fringe benefits per year? (c) What are Duane’s total yearly job
benefits? (d) What are Duane’s total yearly job expenses? (e) What are
Duane’s net yearly job benefits?
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(a) $11.25 x 40 = $450 (weekly pay) x 52 (weeks per year) = $23,400 (annual pay)
(b) $23,400 x .29 (29%) = $6,786 (annual fringe benefits)
(c) $23,400 + $6,786 = $30,186 (total yearly job benefits)
(d) $375 + $580 + $934 = $1,889 (total yearly job expenses)
(e) $30,186 - $1,889 = $28,297 (net yearly job benefits)
Percent Relationships
• ___ is 20% more than 50. 50 x .2 = 10, 10 + 50
= 60
• 40 plus 6% of itself = ___. 40 x .06 = 2.4, 2.4 +
40 = 42.4
• ___ is 10% less than 80. 80 x .1 = 8, 80 – 8 = 72
• 60 minus 40% of itself = ___. 60 x .4 = 24, 60 –
24 = 36
• 240 is ___% more than 180. 240 - 180 = 60, 60 /
180 = .3333 = 33 1/3%
• 45 is ___% less than 60. 60 – 45 = 15, 15 / 60 =
.25 = 25%
Straight Commission
• Straight commission is earned when an
employee sells a specific product for a company.
It can be calculated as a rate per item or it can
be a percentage of a sale.
– A salesperson who works a straight commission basis
sold 5 copy machines at $4,500 each. The
commission rate was 6%. The amount of commission
was $___.
• $4,500 x 5 = $22,500 total sales
• $22,500 x 0.06 = $1,350 amount of commission
Salary Plus Commission
• Salary plus commission is when an employee is
paid a set amount per hour plus a commission
when they sell set amounts of certain items to
stimulate sales.
– Mary Banjavic is paid a salary of $200 a week plus
4/ % commission on weekly sales over $7,500. Her
5
sales last week totaled $14,100. Her total earnings
for the week were $___.
• $14,100 - $7,500 = $6,600
• $6,600 x .008 (4/5%) = $52.80 commission
• $200 + $52.80 = $252.80 total earnings for week
Graduated Commission
• Graduated commission is when an employee is paid
commission an amount on a tier basis.
– Tony Bollini sells encyclopedias. His monthly commission is
based on the number of sets sold in a month. He earns $45
each for the first 25 sets, $60 each for the next 25 sets, and
$75 each for each set over 50 sets he sells. Bollini sold 27
sets in November and 55 in December. His total
commission for the two months was $___.
25 sets x $45 = $1,125
2 sets x $60 = $120
$1,125 + $120 = $1,245 for November
25 sets x $45 = $1,125
$1,245 + $3,000 = $4,245 for the two months
25 sets x $60 = $1,500
5 sets x $75 = $375
$1,125 + $1,500 + $375 = $3,000 for December
Finding Commission Rates
• Commission divided by sales.
• On sales of $34,000, a sales person earns
$2,720 commission. The rate of commission is
___%.
– $2,720 / $34,000 = 0.08 = 8% rate of commission
More Finding Commission
• Susan Favre sold her home through Tri-Town
Realty Company, which charges a 6% sales
commission. Her agent was Vince Pineta.
Vince had advertised Susan’s home for sale
at $175,900, but was able to sell it for only
$165,500. If Vince’s share of the commission
was 3 ½%, he earned $___ commission on
the sale.
– $165,500 x 0.035 = $5,792.50 commission
Finding Net Proceeds
• Joe Popoff, a collection agent, collected 90%
of a debt of $5,600 which had been overdue
90 days. This collection rate was 5% more
than the average collection rate for that agent.
The agent charged 25% commission. The net
proceeds of the debt were $___.
– $5,600 x 0.90 = $5,040 (amount collected)
– $5,040 x 0.25 = $1,260 (commission)
– $5,040 - $1,260 = $3,780 (net proceeds)