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Gross Pay for Various Compensation Methods

Gross Pay for Various Compensation Methods. CONT 110. Terms used. Commission Compensation in the form of a percentage of total sales Piecework Compensation based on the number of pieces completed Piece Rate The amount paid for each piece produced Returned Merchandise

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Gross Pay for Various Compensation Methods

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  1. Gross Pay for Various Compensation Methods CONT 110

  2. Terms used • Commission • Compensation in the form of a percentage of total sales • Piecework • Compensation based on the number of pieces completed • Piece Rate • The amount paid for each piece produced • Returned Merchandise • Goods returned due to defects, errors, or other reasons • Salaried • An employee who is paid an annual amount which is divided over a given number of pay periods

  3. Calculate compensation by salary • Example: • Nadia Manez is an elementary school teacher working for the Lakemont Independent School District (LISD). Nadia signed a contract with LISD for an annual salary of $29,800, to be paid in 12 equal payments. What are Nadia’s monthly gross earnings? • $29,800 / 12 = $2,483 (rounded)

  4. Calculate compensation by salary plus commission • Commission is paid for net sales (total sales – returned merchandise over a set quota). • Example • Gary Parsons salary is $500 per week. This week his total sales were $2,500, and $75 in merchandise was returned. His quota is set at $1,700. His commission is based on 6% of sales minus returned merchandise after he has met his quota. Calculate Gary’s gross earnings for the week.

  5. Calculate compensation by salary plus commission

  6. Calculate compensation by piecework • Example: • Toby Jennings works for a wholesale drug warehouse. He is compensated based on the number of lines he fills from an order form. His job is to read each order and, for each line, go to the proper bin in the warehouse and pull the number of items ordered on that line. He is paid a piece rate of $0.04 for each line he fills. Toby filled 15,193 lines items this pay period. • 15,193 * $0.04 = $607.72

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