Wages and salaries
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WAGES AND SALARIES. WAGES AND SALARIES It is important that employees are properly rewarded for the work they do. PAYMENT SCHEMES There are a number of methods which can be used to reward employees for the work they do. Annual salaries Time Rates Piece Rates Commission Fees

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WAGES AND SALARIES

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Wages and salaries

WAGES AND SALARIES

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Wages and salaries

WAGES AND SALARIES

It is important that employees are properly rewarded for the work they do.

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Wages and salaries

  • PAYMENT SCHEMES

  • There are a number of methods which can be used to reward employees for the work they do.

  • Annual salaries

  • Time Rates

  • Piece Rates

  • Commission

  • Fees

  • Fringe Benefits

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Wages and salaries

  • ANNUAL SALARIES

  • Fixed amount agreed per year

  • Hours and conditions of work laid out in Contract of Employment

  • Suitable method for permanentfull time staff

  • Suitable for professional, management positions

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Wages and salaries

TIME RATES

Paid hourly rate, eg £5.00 per hour

Standard working week, eg, 35 hours per week

Basic pay calculated £5 x 35 hours = £175

Hours worked in excess of standard pay is OVERTIME

Overtime may be at time and a half or double time.

Double time = £10; Time and a half = £7.50 per hour

Gives guaranteed income for employees

Used where quality of work is more important than time taken

Suitable for service sector workers

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Wages and salaries

  • PIECE RATES

  • Pay is linked to output

  • Agreed rate for every item produced eg £1 per garment completed

  • Used as an incentive, the more a worker produces the more they will earn

  • Workers usually given target to meet

  • Can result in low wages

  • Need for quality control to ensure goods made are of a standard

  • Used in manufacturing industries

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Wages and salaries

  • COMMISSION

  • Used in sales, eg insurance, telesales etc

  • Some or all of employees’ earnings are based on the amount of sales they make eg, 10% commission paid on monthly sales total of £10,000 = commission of £1,000

  • Used as an incentive to workhard and as a reward

  • Wages can fluctuate greatly from month to month depending on sales

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Wages and salaries

  • FEES

  • Payment for ‘one’off’ tasks

  • Tasks geared towards needs of clients

  • Amount paid will depend on time taken and difficulty of task

  • Examples

  • Solicitors

  • Performers

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Wages and salaries

  • FRINGE BENEFITS

  • Payments otherthanwages or salaries

  • Often made to executive, management and professionals

  • Some benefits are subject to tax

  • Have grown in importance, gives status to people

    Examples

  • Private medical insurance

  • Company car

  • Free transport

  • Subsidised meals

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Wages and salaries

DEDUCTIONS

No matter which method of payment is used to calculate GROSS PAY, deductions are then made to give NET PAY (take home pay)

GROSS PAY less DEDUCTIONS = NET PAY

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