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  # Pay, Benefits, and Working Conditions - PowerPoint PPT Presentation
  
  Pay, Benefits, and Working Conditions. Chapter #1. Understanding Pay, Benefits, and Incentives. Section #1.1. Section Goals. Compute payroll deductions and net pay. Identify optional and required employee benefits and recognize their value. Gross Pay, Deductions, and Net Pay.
  
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  Presentation Transcript
  
  Chapter #1
  
  ### Understanding Pay, Benefits, and Incentives
  
  Section #1.1
  
  Section Goals
  • Compute payroll deductions and net pay.
  • Identify optional and required employee benefits and recognize their value.
  Gross Pay, Deductions, and Net Pay
  • Gross pay includes your regular pay plus overtime wages earned during that pay period.
  • Gross Pay:
  • The total amount you earn before any deductions are subtracted.
  • Overtime:
  • Time worked beyond the regular hours.
  Calculating Gross Pay (Hourly)
  • Determine the number of hours you worked during the pay period.
  • Multiply your hourly wage by the number of hours worked to calculate your gross pay amount.
  Example: Calculating Gross Pay (Hourly)
  • M.J. Smith works for \$6.50 an hour. They worked 40 hours during this pay period. What is M.J.’s gross pay for this pay period?
  
  \$6.50 x 40 = \$260.00
  
  Calculating Gross Pay with Overtime
  • Determine the number of regular time hours you worked during the pay period.
  • Determine your overtime pay rate (hourly wage x 1.5).
  • Determine how many overtime hours you worked during the pay period.
  • Multiply the number of overtime hours worked by your overtime pay rate.
  Example: Calculating Gross Pay with Overtime
  • During the next pay period, M.J. Smith worked 40 hours at \$6.50 an hour. In addition to the regular 40 hours worked, she also worked 5 hours of overtime during this pay period. What is her total gross pay with overtime?
  
  \$6.50 x 40 = \$260.00
  
  \$6.50 x 1.5 = \$9.75
  
  \$9.75 x 5 = \$48.75
  
  \$260.00 + \$48.75 = \$308.75
  
  Calculating Gross Pay (Salary)
  • Determine how many time you will receive a paycheck during the year.
  • Divide your annual salary by the number of pay periods there are during the year.
  Example: Calculating Gross Pay (Salary)
  • T.S. Jones works for \$24,000 per year. They get paid every two weeks. What is T.S. Jones’s gross pay each pay period?
  
  52 weeks / 2 = 26 pay periods
  
  \$24,000 x 26 = \$923.08
  
  Deductions
  • Deductions are subtracted from gross pay to determine net pay.
  • Deductions:
  • Amounts subtracted from your gross pay.
  • Net Pay:
  • Gross pay minus deductions.
  Calculating Net Pay (Hourly)
  • Determine hourly gross pay.
  • Add together the amount of each deduction.
  • Subtract gross pay from the total amount of deductions.
  Example: Net Pay (Hourly)
  • M.J. Smith’s gross pay for this pay period was \$260.00. The following deductions were taken out: Federal Tax (\$13.00), Medicare (\$4.48), Savings Account (\$20.00), Health Insurance (\$11.00), Union Dues (\$2.50). What is M.J. Smith’s net pay for this pay period?
  
  \$13.00 + \$4.48 + \$20.00 + \$11.00 + \$2.50 = \$50.98
  
  \$260.00 - \$50.98 = \$209.02
  
  Calculating Net Pay with Overtime
  • Determine your total gross pay plus overtime.
  • Add together the amount of each deduction.
  • Subtract your total gross pay plus overtime from the total amount of deductions.
  Example: Net Pay with Overtime
  • During the next pay period, M.J. Smith worked 5 hours of overtime which made her total gross pay \$308.75. The following deductions were taken out of her pay: Federal Tax (\$14.50), Medicare (\$5.58), Savings Account (\$20.o0), Health Insurance (\$11.00), Union Dues (\$2.50). What is M.J. Smith’s net pay?
  
  \$14.50 + \$5.58 + \$20.00 + \$11.00 + \$2.50 = \$53.58
  
  \$308.75 - \$53.58 = \$255.17
  
  Calculating Net Pay (Salary)
  • Determine the gross pay for each pay period.
  • Add together the amount of each deduction.
  • Subtract the total amount of deductions from the gross pay amount.
  Example: Net Pay (Salary)
  • T.S. Jones’s gross pay this pay period was \$923.08. The following deductions were taken out: Federal Tax (\$78.00), Medicare (\$26.88), Savings Account (\$20.00), Health Insurance (\$11.00), Union Dues (\$2.50), Life Insurance (\$3.80). What is T.S. Jones’s net pay for this pay period?
  
  \$78.00 + \$26.88 + \$20.00 + \$11.00 + \$2.50 + \$3.80 = \$142.18
  
  \$923.08 - \$142.18 = \$780.90
  
  Self-Employed Requirements
  • Self-employed people pay both the employee and employer portions of social security and Medicare.
  • Self-Employment Tax:
  • The total social security and Medicare tax, including employer-matching contributions paid by people who work for themselves.
  • Self-employed people pay 12.4% of their gross income. for the social security tax and 6.2% of their gross income for the Medicare tax which totals 15.3% of their gross income.
  Benefits and Incentives
  • Benefits:
  • Forms of employee compensation in addition to pay.
  • Cafeteria-style plans allow employees to choose the benefits that best meet their needs.
  • Benefits in addition to pay may include:
  • Profit Sharing:
  • Incentive Pay:
  • Money offered to encourage employees to strive for higher levels of performance.
  • Paid Time Off
  • Employee Services
  • Insurance Plans
  • Bonuses
  • Stock Options
  • Retirement Plans
  • Vested:
  • Entitled to the fill retirement account.
  
  ### Work Arrangements and Organizations
  
  Section #1.2
  
  Section Goals
  • Explain several flexible job arrangements.
  • Describe the role of unions and professional organizations in the workplace.
  Flexible Work Arrangements
  • Flextime, a compressed workweek, job rotation, job sharing, permanent part-time jobs, and telecommuting offer employees flexibility.
  • Flextime:
  • Allow employees to choose their working hours within defined limits.
  • Compressed Workweek:
  • A work schedule that fits the normal 40-hour week into less than 5 days.
  • Job Rotation:
  • Job Sharing:
  • A job design in which two people share one full-time position.
  Labor Unions
  • Labor unions negotiate the terms of work contracts with employers on behalf of their members.
  • Labor Union:
  • A group of people who work in the same or similar occupations, organized for the benefits of all employees in these occupations.
  • Functions of Unions:
  • Collective Bargaining:
  • The process of negotiating the terms of employment for union members.
  • Seniority:
  • A policy in which the last workers hired will be the first fired when jobs must be cut.
  Professional Organizations
  • Professional organizations serve people in highly skilled occupations.
  • Professional Organization:
  • An organization of people in a particular occupation that requires considerable training and specialized skills.
  • These organization maintain standards and keep members current in their fields.
  • Lobbying:
  • The process of trying to influence public officials to take political action the benefits the profession.
  Bibliography
  • Ryan, J. (2006). “Managing your personal finances; 5th ed.” Thomson South-western; Mason, Ohio