Earning Income Study Notes

Fundamentals of Income and Time Conversions

  • Percent means out of 100100. To convert a percent to a decimal, divide by 100100 (e.g., 6%→0.066\% \rightarrow 0.06, 1%→0.011\% \rightarrow 0.01).

  • "Earning of" indicates multiplication.

  • Time conversion constants:

    • 365 days/year365\,\text{days/year}

    • 52 weeks/year52\,\text{weeks/year}

    • 12 months/year12\,\text{months/year}

    • 7 days/week7\,\text{days/week}

    • 24 hours/day24\,\text{hours/day}

  • Fractional hour equivalencies:

    • 1 hour=60 min1\,\text{hour} = 60\,\text{min}

    • 0.5 h=30 min0.5\,\text{h} = 30\,\text{min} (or 12 hour\frac{1}{2}\,\text{hour})

    • 0.25 h=15 min0.25\,\text{h} = 15\,\text{min} (or 14 hour\frac{1}{4}\,\text{hour})

    • Conversion formula: decimal×60 min/h=time in minutes\text{decimal} \times 60\,\text{min/h} = \text{time in minutes}

  • Income is defined as money received for work.

  • Salaries and contracts are calculated on an annual basis (per year).

  • Determine annual income before calculating monthly or weekly earnings.

Wages, Overtime, and Shift Premiums

  • Money answers must always include a dollar sign ()andberoundedto) and be rounded to2 decimal places:\n * 102.573 \rightarrow \$102.58\n * 124.813 \rightarrow \$124.81\n * 94.6 \rightarrow \$49.60\n* Shift premium is an additional amount of money for working outside regular workday hours or on weekends (Saturday and Sunday). It is added to the hourly wage for specific hours only, and rates may vary.\n* Weekdays consist of Monday through Friday.\n* Reference for minimum wage calculations includes Yukon minimum wage.\n* Time sheets are read by rounding to the nearest hour or 30minutes(minutes (0.5\,\text{h}).\n* Overtime calculation rates:\n * Time + one half: Hourly wage multiplied by 1.5\n * Double Time: Hourly wage multiplied by 2\n\n# Commission and Piece Work\n\n* Straight commission is payment based directly on sales.\n* Base salary is payment for a given work period (hour, week, or month) that does not include additional pay.\n* Workers may earn straight commission or a combination of base salary plus commission.\n* Commission rates may vary based upon sales volume:\n * Example: 2\%onthefirston the first\$10,000,then, then3\%onsalesoveron sales over\$10,000\n * For \$45,000insales:in sales:0.02 \times \$10,000 = 200andand0.03 \times \$35,000 = 1050,givingatotalof, giving a total of1260\n* Piece work is payment based upon the number of items created or completed (e.g., 41\phi = \$0.41).\n\n# Gross Income and Net Income Calculations\n\n* Gross Income is the total amount of money earned in a pay period, before deductions.\n* Bonus is an additional payment to a worker as a reward for meeting company goals.\n* Net Income (also known as take home pay) is the money left after deductions are taken from gross income.\n* Core equation: \text{Gross Income} - \text{Deductions} = \text{Net Income}$$

  • Deductions can be calculated individually or by adding percentages together to determine total deductions in one step.

  • Additional deductions (e.g., insurance, savings) are subtracted from Net Income or after initial deductions are calculated.

  • Comparing types of income requires using all known income styles to calculate and evaluate various total earnings.