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MONEY & FINANCE · LESSON 05

Wages, Salaries and Commission

Understand earnings, overtime, commission, gross pay and net pay.

⏱️ 20–25 min 📘 Developing 💼 Real-life examples included

Learning Objectives

Introduction

This lesson develops Wages, Salaries and Commission from meaning and patterns before moving to calculations. Look for what the quantities, shapes or symbols represent, then connect that idea to the method.

Key Notes

Read the definitions and key facts below carefully. Each rule is most useful when you can explain why it fits the situation, not simply recall it.

💼 Interactive Payslip Builder

Adjust hours, rate, sales, commission and deductions to see gross and net pay.

Overtime pay
Commission
Gross pay
Net pay

Pay scale

Basic + overtime
Commission
Net pay
$0$500$1,000$1,500$2,000+
Here overtime is paid at 1.5 times the normal rate after 40 hours. In exam questions, always use the rule given.

🌍 Where Will You Use This?

Payslips, employment contracts and sales jobs use wages, salaries, overtime, commission, bonuses and deductions.

Wages and Salaries

Wage

Often based on hours worked, days worked or units produced.

Salary

A regular fixed payment, usually monthly or annually.

Basic Pay

Pay = Rate × Time worked

A worker earns US$4.50 per hour for 36 hours.

Pay = 4.50 × 36 = US$162.

Overtime

Overtime may be paid at time-and-a-half, double time or another stated rate.

A worker earns US$6 per hour and works 40 normal hours plus 8 hours at time-and-a-half.

1

Normal pay = 40×6 = US$240.

2

Overtime rate = 1.5×6 = US$9.

3

Overtime pay = 8×9 = US$72.

4

Total gross pay = US$312.

Commission

Commission = Commission rate × Sales value

A salesperson earns 6% commission on US$4,500 sales.

Commission = 0.06×4500 = US$270.

Gross and Net Pay

Gross pay = Basic pay + Overtime + Commission + Bonuses
Net pay = Gross pay − Deductions

Simple Payslip

Basic salaryUS$520.00
Commission+US$85.00
Gross payUS$605.00
Deductions−US$74.00
Net payUS$531.00

💼 Money Smart Tip

Gross pay is not the amount taken home. Always check deductions to understand net pay.

🧠 Let’s Think Together

Before calculating, identify the information given, the result required and the mathematical relationship that connects them. Predict whether the answer should be larger, smaller or unchanged, then use that prediction to check the result.

Worked Examples

Reason through the method

  1. Identify the known information and what must be found.
  2. Choose the definition, property or formula that connects them.
  3. Substitute carefully and show each step.
  4. Check the notation, units and whether the result is sensible.

Practice Questions

Foundation
  1. Find the wage for 32 hours at US$5.25 per hour.
  2. Find 4% commission on US$8,000 sales.
  3. Gross pay is US$640 and deductions are US$93. Find net pay.
Developing
  1. A worker earns US$7 per hour for 40 hours and double time for 5 overtime hours. Find gross pay.
  2. A salesperson earns a basic salary of US$350 plus 5% commission on US$6,400 sales. Find gross pay.
  3. A payslip shows gross pay of US$780. Deductions are 8% of gross pay plus a fixed US$25. Find net pay.
Challenge
  1. A worker earns US$5.50 per hour for the first 40 hours, time-and-a-half for the next 10 hours and double time beyond 50 hours. Find the gross pay for 56 hours.

✅ Check Your Work

Show practice answers
  1. 32×5.25 = US$168.
  2. 0.04×8000 = US$320.
  3. US$547.
  4. Normal = 40×7=280; overtime=5×14=70; gross=US$350.
  5. 350+0.05×6400 = US$670.
  6. Deductions=62.40+25=87.40; net=US$692.60.
  7. First 40: 40×5.50=220.
    Next 10: 10×8.25=82.50.
    Final 6: 6×11=66.
    Total = US$368.50.

Common Mistakes

Exam Focus

Show the mathematical relationship you are using, keep notation consistent and give a clear final answer. Use a quick estimate, diagram or inverse operation to check that the result is reasonable.

Summary