Mathematics Principles V11

Clive W. Humphris

PERSONAL FINANCE: Wages and Salaries.  

Employees receive income as a result of working for which payment is made. This is often called remuneration and is the reward for work done.

There are two main methods of payment, an annual salary which is an agreed sum for a period of a year and is paid in twelve equal monthly amounts or every four weeks. Subtracted from this will be deductions for National Insurance, Income Tax, pension contributions etc.

The other common method is a weekly wage which is money earned for a fixed number of hours at a fixed rate. Overtime payments are made for working more than the agreed number basic hours at an enhanced rate often referred to a time-and-a-half or double-time, or even treble-time for working over a Christmas holiday period.

Gross pay or salary is the amount paid before deductions and net or take-home-pay is after deductions (sometimes called stoppages) have been made by the employer. Net pay for salaried workers tends to be the same every month, unless additional bonus payments are received, whereas weekly wages can vary depending upon the number of additional overtime hours worked.

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