Personal finance - WJECWages and salaries

Wages

IIf you are paid on a daily/weekly basis or if your pay is calculated on the number of hours you work, you are said to receive a wage. Most people on a wage are paid at a set rate for the hours they are employed. If they work more, they might be paid a higher rate. This is called overtime.

Example

Question

How much will a manager get paid if they are contracted to work a 40-hour week but work 48 hours instead (excluding Sunday)?

Solution

40 hours at normal rate: 40 × £13.50 = £540

Overtime hourly pay = 1.5 × £13.50 = £20.25

Eight hours at overtime rate: 8 × £20.25 = £162

Total wage = £540 + £162 = £702

Salaries

A salary is a fixed regular payment which is usually paid monthly to people in professional jobs, eg teachers, doctors, civil servants. The salary is a fixed amount every year and doesn’t change no matter how many hours you work.

Example

Here is a table of teaching salaries with two figures missing. For the next five years the government has frozen pay rises to 1%. Fill in the table of the missing salary amounts for M1 second year and M4 first year.

M1 salary in second year

The salary needs to increase by 1%, to find 1% divide by 100.

Find 1% of previous salary:

£22,243.23 ÷ 100 = 222.4323

Then add it on to the previous salary:

£22,243.23 + 222.4323 = £22,465.66 (to the nearest penny).

M4 salary in first year

Find 1% of previous salary:

£27,650 ÷ 100 = 276.50

Then add it on to the previous salary:

£27,650 + 276.5 = £27,926.50