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Revises: What is income, types of income, irregular vs regular income, income from employment (wages + calculations, salary, benefits in kind), gross pay vs net pay, deductions, income calculations
What is income
Money received by a person or coming into a household
What are employees
People who work for employers in return for a payment
What is an employer
Someone who pays another person to work for them
What is a pension
Income paid to people who have retired
What is child benefit
Government payments made to parents/guardians of children
What is Jobseeker’s benefit
Government payment made to people who are unable to find employment
What is working family payment
Government payment available to workers with children to give extra financial support to people on low pay
What is a grant
A sum of money paid to someone for a specific reason that doesn’t need to be paid back
What is Interest on savings
A reward of money financial institutions award to those who save money with them
What is a dividend
A portion of company profits paid to a shareholder (a company owner) as a reward for buying shares
What is windfall income
Income you don’t expect, e.g. lotto win
What is regular income
Income received on an ongoing basis, e.g. weekly or monthly
What is irregular income
Income where the timing and amount of it is less predictable and not guaranteed
What are benefits in kind
Non-money income (perks) in the form of goods and services with a money value
What is a salary
A fixed annual payment made to an employee no matter how many hours they work (above an agreed minimum)
What is a wage
A payment received for work done, normally calculated on the basis of actual work completed or on the amount of time spent working
What are the different ways wages can be calculated
Time rate, overtime, piece rate, commission, bonus
What is time rate
Wage calculation based on the number of hours worked
What is overtime
A higher rate of payment for extra hours worked above the standard working week
What is piece rate
Wage calculation based on the number of items completed
What is commission
A payment based on a percentage of the value of goods or services an employee sold
What is a bonus
A reward of extra payments for meeting performance targets or deadlines
What is basic pay
The amount earned before extra payments (overtime, bonuses, commission) are added
What is gross pay
The total pay before any deductions.
What is net pay (take-home pay)
Amount of pay left after deductions are taken from gross pay
What are the two types of deductions from gross pay
Statutory and voluntary
What are statutory deductions
Deductions that are compulsory and every worker is required by law to pay
What are voluntary deductions
Deductions that aren’t compulsory but workers may choose to pay them
What are the statutory deductions workers have to pay
Pay as you earn tax, pay related social insurance, universal social charge
What voluntary deductions can workers pay
Private pension, savings, loan repayment, private health insurance, trade union membership
What is disposable income
Remaining income after all income taxes and statutory payments have been made that’s now available for all types of spending or saving
What is discretionary income
Income left over after taxes, statutory deductions and essential expenditure (e.g. rent/mortgage, food, bills)
What is an income plan
Records that help a household estimate their future income
