JUNIOR CYCLE BUSINESS STUDIES Understanding payslips A
Go to page 12 of your Activities and Accounts Book to answer questions about payslips.
Completing payslips A
Go to page 14 of your Activities and Accounts Book to complete payslips for a range of employees.
CHAPTER SUMMARY • Paypath is the payment of an employee’s wages directly into their bank account.
• Basic pay is the amount of money earned by an employee for the normal working week, not including additional pay.
• Piece rate is when an employee is paid based on how many items they produce at work. • Overtime is a payment for any extra hours an employee has worked. • Commission is a percentage of sales that is paid to a salesperson. • Gross pay is the total income a person earns. Gross pay is pay before deductions. • A deduction is a sum of money that is taken from an employee’s gross pay. • Statutory deductions are deductions that must be paid. For example, income tax.
• Non-statutory deductions are deductions that an employee chooses to pay. For example, health insurance.
• Net pay is gross pay after deductions. • Tax credits reduce the amount of tax a person owes to the government. • A payslip is a record of an employee’s pay. • Summary of calculations:
Basic pay = basic rate per hour × normal hours worked Piece-rate basic pay = rate per item × number of items produced Overtime pay = number of overtime hours worked × overtime rate Commission = total sales ÷ 100 × commission rate Gross pay = basic pay + overtime/commission/bonus Net pay = gross pay – total deductions Tax payable = total income tax – tax credit
Taking stock A 32
Go to page 17 of your Activities and Accounts Book to check what you have learned in chapter 2.
