1. How is pay calculated? There are different types of pay and different ways of calculating pay: (a) Basic pay is the amount that an employee is paid for a normal working week before any extra payments are added on. If you are employed to work 40 hours every week and are paid €20 per hour, then your basic pay is €800 per week (€20 x 40).
(b) Gross pay is basic pay plus any additional payments such as overtime,
(c) A salary is paid monthly. It is a fixed payment that doesn’t depend on the number of hours worked or the amount of goods produced or sold by the employee in a given period.
(d) A wage is a payment made to an employee that depends on the number of hours worked or the amount of goods produced or sold by the employee in a given period.
(e) A time rate of pay is determined by the number of hours worked. The more hours worked, the higher the wage.
Example: Calculating time rate of pay Aleksy works in a factory and is paid €25 per hour. Production of goods in the factory fluctuates considerably and Aleksy is only paid for the hours that he works each week. Last week he worked 22 hours. Aleksy’s gross pay can be
calculated as follows: €25 x 22 hours = €550 Basic Pay Gross Pay
€550 €550
(f) Overtime is paid in some jobs for working extra hours in a week. Overtime is often paid at a higher hourly rate as compensation for working longer hours.
Example: Calculating overtime Sue works in a shop and is paid €20 per hour. She usually works 36 hours per week earning a basic wage of €720 per week. At Christmas time Sue is asked to work overtime by doing five extra hours a week, to be paid at time-and-a-half of her basic wage. Sue’s gross pay for that week can be calculated as follows:
Note: Time-and-a-half means 1.5 times her basic hourly rate. €20 x 1.5 = €30 per hour for each of the extra 5 hours. This would be worth €150 extra to Sue that week. Basic Pay
