Chapter

1: Earning Income
Math 103

Notes Booklet

Name:_____________________

Chapter1EarningIncome
1.1 IdentifyingWaysofEarningIncome
Income:moneyreceivedforwork.
Inyourgroups,brainstorm4or5differentjobsthatexisttodaythatdidnotexist100yearsago.

Peopleearnincomeinavarietyofways.Howtheyarepaiddependsonthejobtheyhave.

Recallthejobsyoubrainstormedearlier.Howwouldapersoninthatjobearnincome?

1.2 SalariesandContracts
Annual:onceayear.

Thereare:

____________monthsinoneyear

____________weeksinoneyear

____________daysinoneyear

Ifapersonispaidannually,youmayhavetocalculateamountsperpayperiod.

Ex.Ifyouarepaidanannualsalaryof$36000,howmuchdoyoureceive:
a. permonth?

b. perweek?

c. perday?

Grossincome:thetotalamountofmoneyearnedinapayperiodBEFOREdeductions.
Bonus:anadditionalpaymentasarewardformeetingspecificgoals.
Contract:anagreementbetweentwopeopleforcompletingajob.

Theseconceptscanbeappliedtoincomeproblems.

Example1
Nellieistheheadchefofarestaurant.Herannualsalaryis$56000.
a) HowmuchdoesNellieearnineachmonth?

b) HowmuchdoesNellieearnineachweek?

Example2
Pauldesignshouses.Heispaidbycontractfromeachbuilder.Thisyearheearned$25000,
$15200,$19750,and$31800onfourcontracts.Whatishisgrossincome?

WorkingwithPercentages

InMath,thewordofmeanstomultiply.Ifyouhave2groupsof3items,howmanyitems
doyouhave?

Anytimewesee____%of,thisisourcuetomultiply.Beforemultiplying,wemustfirst
changethe%toadecimal(divideby100).
Ex.

3%of5000

2.5%of15000

1%of3500

Example3
Tomisaprojectmanagerforapublishingcompany.Hisyearlysalaryis$65000.Thisyearhe
willalsogetabonusthatis2%ofhissalary.WhatisTomsgrossincomeafterthebonushas
beenadded?

Example4
Completethefollowingchartonearnings.
AnnualSalary

$58500

$____________

$____________

MonthlyEarnings

$____________

$21000

$____________

WeeklyEarnings

$____________

$____________

$430

Example5
Whichisgreater?
a) Anannualsalaryof$67000oranannualsalaryof$64500plusa3%bonus?

b) Aoneyearcontractfor$82750oranannualsalarybasedon$1575perweek?

1.3 CalculatingIncome:HourlyWage

HourlyWage:Afixedpaymentforeachhourofwork.
ShiftPremium:anadditionalamountofmoneyforworkingoutsideofregularworkdayhoursor
onweekends.

Example1
Sarahearns$12.45perhourasacashier.Lastweeksheworked35hours.WhatwasSarahs
grossincomefortheweek?

Example2
Leviworksatatiremanufacturingplantandearns$10.20/hourdayshift.Whenheworks
eveningornightshifts,heearnsashiftpremiumof$1.15/h.
Lastmonthheworked:
80hoursondayshift
40hoursonevenings
40hoursonnights
Whatwashisgrossincomeforthemonth?

Example3
Completethechart.
GrossIncome

$457.80

$233.50

$197.00

Hoursworked

24

35

28

HourlyWage

$____________

$____________

$____________

Example4
Jackisamechanic.Heearns$27.50/hplusashiftpremiumof$1.55forworkingonweekends.
Hishoursworkedareshownbelow.WhatwasJacksgrossincomefortheweek?

Mon
Tues
Wed
Thurs
Fri
Sat
Sun

Hours
Worked
8
8
8
8
8
10
0

Totalweekdayhours:____________Rate:__________

Totalweekendhours:____________Rate:__________

Grossincome:

Example5
Chrisworksasawaiter.Heearns$12/handmakes$75intipseachweek.Ifheworks35hours
eachweek,
a) whatishisgrossincomefor3weeks?

b) howmanyweekswillittakehimtoearn$5000?

Example6
Kathyearns$52000/year.
Debearns$23.50/h.
IfDebworks40heachweekfor50weekseachyear,whohasthehighergrossincomeforthe
year?Byhowmuch?

1.4 CalculatingIncome:Overtime
Aregularworkweekis40hours.
Overtime:anyhourworkedover40hours.Overtimehoursarepaidhigherthanregularhours.
TherearedifferentlawsthatgovernovertimeandpayinAlberta.Wheneveryougetanewjob,
makesurethatyouknowhowtheemployerdealswithovertimesoitdoesnotbecomean
issue.
Theselawsarenotthesameforeveryjob.

Timeandahalf:thehourlyratemultipliedby1.5

Ex.

$10.00/h

Overtimerate:

$23.50/h

Overtimerate:

Doubletime:thehourlyratemultipliedby2

Ex.

$10.00/h

Overtimerate:

$23.50/h

Overtimerate:

Example1
Joeearns28.30/handmakesdoubletimeforhoursworkedbeyond40eachweek.Heworked
45.25hourslastweek.WhatwasJoesgrossincome?

Example2
Cindyearns$23.00/handmakestimeandahalfforhoursworkedbeyond40hourseachweek.
Sheworked45hourslastweek.WhatwasCindysgrossincome?

Example3
Sallyworked3hoursand45minutes.Whatisthistimeinhoursonlyasadecimalnumber?

Benworked8.25hours.Whatisthisinhoursandminutes?

Example4
Mannyworksonafarmandclocksinandoutusingatimecard.Heearns$9.20/handispaid
timeandahalfforanyhoursworkedover40hinoneweek.Histimecardforoneweekis
shown.WhatisMannysgrossincomefortheweek?

In

Out

In

Out

Shift Hours
Worked
1
9.50
1
10.00
1
5.00
1

1
8.50
1
9.50
1
9.50

TimeOff
Hours

Thursday
06:07A 01:00P 01:25P 04:03P
Friday
06:00A 12:59P 01:27P 04:27P
Saturday
05:58A 11:01A : :
Sunday
: : : :
Monday
06:05A 12:58P 01:27P 03:08P
Tuesday
06:02A 12:51P 01:18P 04:00P
Wednesday 05:58A 12:00P 12:30P 04:00P

RegularHours:OvertimeHours:Totalhours:

RegularHourlyRate:_________________ Totalregularhours:_________________
Regularearnings:

OvertimeHourlyRate:_________________Totalovertimehours:_________________
Overtimeearnings:

Grossincome:

Total
Hours
9.50
10.00
5.00

8.50
9.50
9.50

1.5 CalculatingIncome:Commission
BaseSalary:paymentforagivenworkperiod,suchashourorweek,butnotincluding
additionalpay.
Straightcommission:paymentbasedonlyonsales.

Recall:
6%of$500=___________

2.5%of$1400=___________

Example1
Abbeyisarealestateagentearningstraightcommission.Hercommissionrateis4%ofthe
sellingpriceofeachhomeshesells.Thismonthshesold2homes.Whatwasthecommission?

Home1:$255000
Home2:$304999

Example2
SabrinaisasalespersonatBestBuy.Sheearnsabasesalaryof$340/week.Shealsoearns1.5%
commissiononthetotalvalueofallthegoodsshesellseachmonth.Thesearehersalesfor
November:

November115
November1630

$55340
$75920

WhatwasSabrinasgrossincomeforNovember?

Example3
Martysellscellphones.Heispaid$6.55/hour,andheearns3%commissiononsalesover
$4000inonemonth.Ifheworks36hoursandsells$5560inphones,whatwouldhisincomebe
forthatmonth?

1.6 CalculatingIncome:Piecework
Piecework:paymentforpiecessold/made.

Example1
Dominicdeliverscatalogues.Heispaid30foreachonehedelivers.Lastnighthedelivered234
catalogues.Howmuchdidheearn?

Example2
RosssellsprogramattheLethbridgeHurricanesgames.Heearns$20pergame,plus23for
eachprogramhesells.Lastgamehesold244programs.HowmuchdidRossearn?

GraduatedPiecework:asmoreworkisdonemoremoneyisearnedperpieceatlevels.
Example3
Tinagotanafterschooljobdeliveringmailoutsforamailordercompany.Shewaspaid$20
perdayandpieceworkaccordingtothetableshownbelow.
First200letter

$0.20each

Next50letters

$0.30each

Next25letters

$0.40each

Over275letters

$0.45each

Wednesday:Shemailed242letters.
Thursday:Shemailed265letters.
Friday:Withhermom'shelp,shemailed282letters.

Howmuchdidsheearnintotal?

1.7 ComparingTypesofIncome

Example1

Paulearns$9.40/h
Maryearns8.10/handgetstimeandahalfforhoursworkedover40hperweek.

Theybothwork50hoursinoneweek.Whoearnsmore?Byhowmuch?
Paul

Mary

Example2
SamisawaiterandJanesellsmagazinesubscriptions.

Sam: $8.00/h
Jane: $280/week

40hperweek
4%commission

$300/weekintips
$3300/weekinsales

Whohasahighergrossannualincomeiftheybothworkfor50weeks/year.
Sam

Jane

Example3
Jodiinstallsandrepairstelephones.Sheearns$21.20/hplustimeandahalfforanyhours
workedover40perweek.Lastweeksheworked49hours.
Aidanearnsanannualsalaryof$43000asthedirectorofsalesatacomputercompany.
Whohadthehighergrossincomelastweek?
Jodi

Aidan

Example4:
Supposeyouaresavingmoneytobuyacar.Todothis,youwouldliketoearnatleast$400a
week,andhavetwoparttimejoboffers.

JobApays$11.75/h,30haweek
JobBpays$9.50/h,25haweek,plus5%commissiononsalesofabout$4500/week

Whatjobwouldyoutake?
JobA

JobB

1.8 CalculatingNetIncome
NetIncome:themoneyleftafterdeductionsaretakenfromgrossincome.Alsocalledtake
homepay.

Example1
Markworksforalandscapingcompany.Lastweekhisgrossincomewas$287.Hisdeductions
totalled$45.36.WhatisMarksnetincome?

Example2
Shannonisthemanagerofasportinggoodsstore.Sheearns$770weekly.Calculateher
standarddeductionsbasedonthechartbelow.

DEDUCTION RATE
INCOMETAX 15%
EI
1.73%
CPP
4.95%

IncomeTax:

EI:

CPP:

Example3
Toddearnsaweeklysalaryof$635asacomputertechnician.Thedeductionsfromhisgross
incomeareshownbelow.Whatishisnetincomefortheweek?