COMPUTATION OF SALARIES, WAGES, BENEFITS, AND DEDUCTIONS
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12 Terms
Net Income
The amount of money that an employee takes home after all statutory and voluntary deductions have been applied.
Basic Salary
The initial amount of income an employee receives before any bonuses, commissions, or deductions are added.
Earnings
Total compensation received by an employee, including salary, commissions, bonuses, and allowances before deductions.
Deductions
Mandatory or voluntary amounts subtracted from an employee's gross income, including taxes and contributions.
Monthly Pay Formula
Annual Salary divided by 12 to calculate the monthly payment.
Semi-Monthly Pay Formula
Annual Salary divided by 24 to calculate the semi-monthly payment.
Weekly Pay Formula
Annual Salary divided by 52 to calculate the weekly payment.
Commission-Based Pay
A form of compensation based on the percentage of sales or performance, often incentivizing employees to increase sales.
Piecework
A payment structure where workers earn a fixed amount per unit produced, regardless of the time taken.
Overtime Pay
Additional compensation for employees who work beyond the standard 8-hour workday, calculated according to specific formulas.
Overtime Pay Formula
Regular Hourly Rate multiplied by a factor (e.g., 1.25) to determine overtime pay.
Commission Calculation Formula
Commission is calculated as Total Sales multiplied by the Commission Rate.