Earning Money

Managing Money

Earning money

Learning objective

• calculate earnings (wages and salaries) in different situations

Different types of earnings

• Wages – pay based on a fixed number of hours worked, usually paid weekly. Extra hours of work are called overtime and these are paid at a higher rate.

• Salary – pay based on a fixed yearly amount, usually paid monthly. Overtime may be paid, or workers may be given time off in exchange.

• Piece work – pay based on the number of items produced.

• Commission – pay is based on a percentage of sales made.

Example 1

Emmanuel makes beaded necklaces for a curio stand. He is paid in South African rand at a rate of R14.50 per completed necklace. He is able to supply 55 necklaces per week. Calculate his weekly income

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Solution:​

Income = 55 X 14.50 = R797.50​

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Example 2

Sanjay works as a sales representative for a company that sells mobile phones in the United Arab Emirates. He is paid a retainer of 800 dirhams (Dhs) per week plus a commission of 4.5% of all sales.

a. How much would he earn in a week if he made no sales?

b. How much would he earn if he sold four phones at Dhs3299 each in a week?

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Solution:​

a. Earning = 800Dhs​

b. Earning = 800 + 4.5% X 3299 X 4 = 1393.82

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Example 3

Josh’s hourly rate of pay is $12.50. He is paid ‘time-and-a-half’ for work after hours on Saturdays and ‘double-time’ for Sundays and Public Holidays. One week he worked 5.5 hours on Saturday and 3 hours on Sunday. How much overtime pay would he earn?

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Solution:​

Saturday overtime = 1.5 x $12.50 x 5.5 = $103.13

Sunday overtime = 2 x $12.50 x 3 = $75

Total overtime = $103.13 + $75.00 = $178.13

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