Study guide
1. Earning and managing money
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 G K Powers 2013
Salary and wages

Salary is a payment for a year’s work which is then
divided into equal monthly, fortnightly or weekly
payments.
 1 year = 52 weeks
 1 year = 26 fortnights
 1 year = 12 months

Wage is a payment for work that is calculated on an
hourly basis.
HSC Hint – Be careful converting time periods. Most months
have more than 28 days (4 weeks).
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 G K Powers 2013
Overtime and special allowances



Overtime is work beyond the normal working day.
 Time-and-a-half rate = normal rate × 1.5
 Double time rate = normal rate × 2
Casual rate is set amount paid for each hour’s work.
Special allowances are given to employees if they work
under difficult or dangerous conditions such as wet
weather, extreme temperatures, confined spaces or
isolated areas.
HSC Hint – Check overtime hours and normal hours add to
the total hours worked in the week.
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 G K Powers 2013
Annual leave loading and bonuses

Annual leave or holiday loading is the payment for going
on holidays.
Holiday loading
= 1712 % × normal weekly pay × weeks leave.

Bonus is an extra payment or gift earned as a reward.
HSC Hint – Add the holiday loading to the normal pay to
determine the pay for the holiday.
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 G K Powers 2013
Commission
Commission is the percentage of the value of the goods sold.
Advantages
 Higher sales increase the income.
 May receive a small payment (retainer) plus the
commission.
Disadvantages
 Income may vary each week.
 Competition for customers is usually high.
HSC Hint – Commissions can be calculated on a sliding
scale. Check your sales are correct.
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 G K Powers 2013
Piecework, royalties and
government income

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Piecework is payment for work completed.
Piecework = Number of units of work
× Amount paid per unit.
Royalty is a percentage of the goods sold or profit
received.
Income received from government includes pensions,
allowances or benefits.
HSC Hint – Check units of measurement are consistent to
ensure piecework payments are accurate.
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 G K Powers 2013
Gross pay, net pay and deductions

Gross pay is the total of the employee’s pay including
allowances, overtime pay, commissions and bonuses.

Deductions is the regular amount of money subtracted
from a person’s wage or salary such as income tax.

Net pay equals gross pay minus deductions.
Net pay = Gross pay − Deductions
HSC Hint – Deductions and allowable deductions for
taxation are different concepts.
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 G K Powers 2013
Budgeting
Budgeting – balancing of income and expenses.
 Budgets are created for a specified time such as weekly.
Creating a budget
1. List all the income categories.
2. List all the expense categories.
3. Calculate the total of the income and expenses
categories.
4. Balance the budget by modifying the categories or
by entering a balance category.

HSC Hint – Check all calculations in the budget are for the
same specified time.
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 G K Powers 2013