2.1 Gross Pay, Net Pay, and Benefits

salary (calculate)

A fixed annual amount of gross pay. Multiply the number of hours you work per week by your hourly wage. Multiply that number by 52 (the number of weeks in a year).

wage

A fixed hourly rate earned by employees.

incentive pay (profit sharing, leaves of absence, expense accounts, employee discounts, employee extras, bonuses, and stock options)

A form of compensation that encourages employees to strive for higher levels of performance.

profit sharing (define)

A plan that allows employees to share a portion of the company's profits at the end of the corporate year.

benefits and incentives

Forms of employer compensation in addition to pay.

bonus (type of bonuses)

Incentive pay based on quality of work done, years of service, or a company's sales and profits. (current profit sharing, gain sharing, spot bonus award, noncash bonus, etc.)

net pay

The amount left after all deductions are taken from an employee's gross pay.

vested retirement income

The point at which employees have full rights to their retirement accounts.

gross pay (& calculation)

The total amount an employee earns before deductions are subtracted. (calculation- (before taxes) based on hours worked and rate of pay per hour including overtime.)

overtime (define the standard number of work hours per week and define how overtime is calculated)

Time worked beyond regular hours. Standard working hours of countries worldwide are around 40 to 44 hours per week. Overtime must be paid at a rate of 11/2 times a covered (nonexempt) employee's regular rate of pay for each hour worked in excess of 40 hours in a workweek (or the maximum allowable in a given type of employment).