Earning Money: Quick Review Notes

Pay Types

• Salary: Agreed, fixed amount per pay period; unaffected by hours worked.
• Wage (Hourly): Payment per hour; may include overtime (OT).
• Commission: Percentage of sales, with or without a base salary.
• Piecework: Payment per unit produced/service rendered.
• Allowances: Extra fixed sums (e.g., holiday shift pay).

Period Prefixes

• "Semi-" = half of the period (e.g., semi-monthly = twice a month).
• "Bi-" = every two periods (e.g., bi-weekly = every two weeks).
• A year has $52$ weeks (≠ $48$), so always base weekly conversions on $52$.

Salary Conversions

• $\text{Annual Salary}= \text{Monthly}\times12$
• $\text{Monthly}= \dfrac{\text{Annual}}{12}$
• $\text{Semi\,monthly}= \dfrac{\text{Annual}}{24}= \dfrac{\text{Monthly}}{2}$
• $\text{Weekly}= \dfrac{\text{Annual}}{52}$
• $\text{Bi\,weekly}= \dfrac{\text{Annual}}{26}=2\times\text{Weekly}$
• $\text{Hourly Rate}= \dfrac{\text{Weekly}}{n}$ ( $n$ = regular hours/workweek, e.g., $40$ or $48$)

Overtime, Commission & Piecework

• Overtime Pay: $\text{OT}\times\text{Hourly Rate}\times\text{Multiplier}$ (common multiplier $=1.5$).
• Commission: $\text{Rate}\times\text{Sales}$.
• Piecework: $\text{Units}\times\text{Rate per Unit}$.
• Total Mixed Earnings: $\text{Base}+\text{OT}+\text{Commission}+\text{Allowances}$.

Quick Payslip Check

1. Re-compute each component using the formulas above.
2. Add all components; compare with payslip total.
3. Any discrepancy signals an error or need for clarification.