Chapter 2: Income, Benefits and Taxes (2-1: Earned Income and Benefits) Flashcards
The lowest pay rate allowed by law for each regular hour of work
Minimum Wage
Pay received for hours worked in addition to regular hours
Overtime Pay
A set fee or percentage of a sale paid to an employee instead of or in addition to salary or wages
Commission
A person who takes the risks of being self-employed and owning a business
Entrepreneur
A business where the owner intends to keep the business small
Lifestyle Business
A secondary occupation an employee enjoys in their spare time
Avocation
A business that continues to grow into a large company with unlimited growth and many workers eventually becoming a corporation
Venture Business
A document that describes the steps that will be taken to open and operate a business
Business Plan
Forms of pay other than salary or wages
Benefits
Money available to spend or save after taxes have been paid
Disposable income
A time when an employee who is not working will be paid
Pay without work
Days when employees will be paid but not have to work
Paid holidays
Examples of paid holidays are:
Thanksgiving Day
Christmas Day
Labor Day
Paid time away from work due to illness
Sick leave
Paid time away from work for personal reasons
Personal leave
An account into which employees contribute a portion of their earnings for their retirement; employers may match these contribution
Retirement plan
A benefit whereby employees may share in the profits of the business
Profit-sharing plan
A benefit for workers that helps cover the cost of medically related expenses
Health insurance
The price paid for health insurance
Premium
Provides payment to replace income lost when illness or injury prevents the employee from working
Disability insurance
An insurance plan that employers are required by law to provide for employee that pays medical and disability benefits to workers who are injured or contract diseases on the job.
Workers’ compensation
A type of retirement plan that businesses offer employees to participate in.
401(k)
Provides payments to retired workers
Pension plan
When employees can avoid paying income tax on money in account until it is withdrawn.
Tax-deferred
Working for a set amount of money, regardless of the amount of time worked.
Salary
Benefits that provide emotional satisfaction or social status rather than money.
Perks
How is being paid a salary different from being paid hourly wages?
Salaried workers get a pay per year or month regardless of how many extra hours they work. Often times with salaried workers you get paid vacation or sick days. With hourly workers you only get paid the hours you work. If you take days off you don’t get paid. Also you have the opportunity to make overtime at an hourly job.
How is educational reimbursement a valuable benefit for employees?
It allows workers to get more education which gives them the potential to get better jobs. With better jobs usually come better pay. This benefits the worker.
