Personal Finance: Module 1 Lesson 3
Determining Your Destiny
Determining Your Destiny • Slide 2
What is employee compensation?
It is the total amount of pay provided to an employee
in exchange for services performed.
Employees can be paid in two ways:
 Direct (monetary)

Indirect (non-monetary)
Video: Overview of Employment Compensation
Understanding Employee Compensation
Determining Your Destiny • Slide 3
Types of monetary compensation

Salary

Wages

Overtime

Commission

Tips

Bonuses

Entrepreneurship
Determining Your Destiny • Slide 4
Salary, wages, and overtime

Salary – a fixed amount paid each pay period no matter
how many hours were actually worked

Wages – usually received as an hourly, daily or weekly rate
of pay; fluctuates based on the actual amount of time the
employee worked during the pay period

Overtime – pay for hours worked over 40 hours in a week
paid at the rate of at least one and one-half the employee’s
regular rate of pay
Determining Your Destiny • Slide 5
Commission, tips, and bonuses

Commission – a common way to
pay sales people. Usually a
percentage of the total price of the
product or services sold during a
pay period

Tips – an extra amount a customer
pays to reward service workers for
providing quality service

Bonuses - an amount paid in
addition to regular pay to reward
good performance by the employee,
company, or both
Determining Your Destiny • Slide 6
Entrepreneurship
(self employment)
A person works for him- or herself and owns
the business

Self-employment
income, called profit,
is money left over
once all business
expenses are paid
Determining Your Destiny • Slide 7
Employee benefits
Indirect or non-monetary compensation provided to
employees (by their employer) in addition to wages,
salary and tips
College Grad
Evaluating Your Benefits Package
Determining Your Destiny • Slide 8
Basic types of employee benefits

Paid leave

Group insurance

Retirement plans

Educational
assistance program

Profit-sharing
and stock options
Determining Your Destiny • Slide 9
Types of paid leave

Holiday pay – worker is
paid for certain holidays
when the place of
employment is closed

Sick leave – worker is paid even though he or she
is not at work due to illness

Personal/annual leave – worker is paid
even though he or she is not at work because
of personal reasons
Determining Your Destiny • Slide 10
Group insurance

Group Health Insurance – employer-sponsored insurance
that helps provide protection against the costs of medical
services and may include dental and vision options.
Flexible Spending Accounts
(FSA) – money that is deducted
from an employee’s paycheck to
pay health care expenses not
covered by insurance
Employment Benefits
Flexible Spending Accounts
Determining Your Destiny • Slide 11
Group insurance

Group Life Insurance provides benefits to dependents
and/or others you name in the case of your death

Group disability insurance replaces lost wages or
income if you are unable to work

Short-term disability replaces a portion of income
for up to six months

Long-term disability
replaces a portion
of income for longer
than six months
Determining Your Destiny • Slide 12
Comparing employee benefits
Worksheets
Health Insurance Cost
Compare Employee Benefits
Links and Activities
Benefits Wizard
Determining Your Destiny • Slide 13
Retirement plans
Employer-sponsored plans help employees be better prepared
for a time when they are retired and no longer working.
401(k) Plans – employee chooses how much money to
deduct from each paycheck and how to invest it
Many employers will offer to match a portion of the employee’s
contribution!
Begin Providing for Your Future
Pension Plans – retirement accounts funded entirely by
the employer
Value varies depending on years worked, salary, etc.
Determining Your Destiny • Slide 14
Educational assistance program
An employee benefit wherein some or all educational
expenses are funded by the employer

Policies are set by employer

May extend to family members
College access tip!
Having part or all
of your education paid for
by an employer is a
valuable benefit!
Determining Your Destiny • Slide 15
Profit sharing and stock options
Profit-sharing – employees are paid a share of
the company’s profit
Stock options – employees receive stock in the
company at a discounted price
Determining Your Destiny • Slide 16
“
Step with care and great tact
and remember that Life’s
a Great Balancing Act.
Oh, the Places You’ll Go! by Dr. Seuss
”
Determining Your Destiny • Slide 17
Work-life balance



We all deserve to be able to balance our careers with
rewarding personal lives!
Employees who feel they have a better work-life balance
tend to work 21% harder.
Find out as much as you can before
deciding if a career opportunity
is right for you:
o
o
o
o
o
Flexible work schedule
On-call or overtime
Overnight travel
Family emergencies
Commute time
Determining Your Destiny • Slide 18
Financial Education for
College Access and Success
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