CHAPTER 2 – UNDERSTANDING PAY Paypath Most employees’ wages are paid directly into their bank account. This is called Paypath. i
Paypath is the payment of an employee’s wages directly into their bank account.
Paypath has a number of advantages over the cash payment of wages: • It is very safe as the money is transferred electronically. • It is fast. • Employees do not need to go to the bank to lodge their wages, so it is very convenient. • It is environmentally friendly as there is less paper.
The disadvantage of Paypath is that there are sometimes banking fees on electronic payments. CALCULATING BASIC PAY
Basic pay is the amount of money an employee earns for the normal working week, not including additional payments such as overtime.
i KNOW? Did You
The minimum wage for an adult in Ireland is €9.15 per hour.
Basic pay is the amount of money earned by an employee for the normal working week, not including additions.
Time Rate
Most employees are paid based on the number of hours they have worked. This is called a time rate.
The basic pay of employees paid a time rate is calculated as follows: Basic pay = basic rate per hour × normal hours worked
Example Laura Ryan works a 40-hour week. She is paid €18 an hour.
Laura’s basic pay per week: 40 × 18 = €720
If you know the basic pay and the number of hours worked, you can calculate the rate per hour:
Rate per hour = basic pay ÷ normal hours worked
Laura’s basic pay is €720 and she works 40 hours a week. 720 ÷ 40 = €18 per hour
