Chapter 1 - Gross Income Review

Front

What is Gross Income?

Back

Gross Income is the total income earned by an individual before any deductions or taxes are applied.

Front

How do you calculate the semimonthly salary from an annual salary?

Back

To calculate the semimonthly salary, divide the annual salary by 24 (the number of pay periods in a year).

Front

What is straight-time pay?

Back

Straight-time pay is the regular hourly wage earned by an employee for hours worked, excluding overtime.

Front

How do you calculate total pay including overtime?

Back

Total pay = (Regular hours x Regular hourly rate) + (Overtime hours x Overtime hourly rate). Overtime rate is typically 1.5 times the regular rate.

Front

What is the formula to calculate commission?

Back

Commission = Total sales x Commission rate.

Front

If an employee earns $8.75 per hour and works 28 hours, how do you find their straight-time pay?

Back

Straight-time pay = Hourly wage x Hours worked = $8.75 x 28 = $245.00.

Front

What is the overtime pay rate for an employee earning $16.50 per hour?

Back

The overtime pay rate is $16.50 x 1.5 = $24.75 per hour.

Front

How do you determine the number of overtime hours worked?

Back

To find overtime hours, subtract regular hours (usually 40) from total hours worked.

Front

What is the significance of rounding in payroll calculations?

Back

Rounding ensures that pay calculations are accurate and comply with payroll policies, often rounding to the nearest cent.

Front

What is the difference between gross pay and net pay?

Back

Gross pay is the total earnings before deductions, while net pay is the amount received after deductions such as taxes and benefits.