F1.2 Earning and Managing Money Flashcards
Wages
A wage is calculated on the number of hours a person worked.
A wage is paid at a fixed hourly rate.
Overtime
If a person works longer than their normal hours they are paid at a higher rate called overtime.
Salary
A salary is a fixed amount of annual pay that is paid weekly, fortnightly or monthly.
People who earn salaries include teachers & police officers.
Commission
Commision is income for selling items, It is calculated as a percentage of the value of the items sold.
Royalties
Royalties are income based on the number of copies of a book or a song that are sold.
Piecework
Piecework is income from making or processing items. It is calculated as a fixed rate per item.
Bonus
A bonus is paid to employees who produce work of a high standard or volume, or for meeting an important quota, goal or deadline.
Allowances
An allowance is paid to employees for work-related expenses (such as tools or laundry) or who work under dangerous or difficult conditions.
Annual Leave Loading
Annual Leave Loading (or holiday pay) is extra pay given during annual leave. It is usually paid at a rate of 17.5% of 4 weeks pay.
Government Allowances
The Australian Goverment provides allowances to support people in need and assist them to become self-sufficient. These allowances include the Age Pension, Youth Allowance and Austudy.
Gross Pay
Gross Pay is the amount a person earns.
Net Pay
Net Pay is the amount remaining after tax and other deductions have been taken from gross pay.
Income Tax
Income tax is money paid to the goverment by people who earn an income. The government uses the tax to provide public services such as roads, schools hospitals.
Allowable Tax Deductions
Not all income is taxable. Allowable Tax Deductions include donations to charities, some work related expenses and depreciation of home office equipment. Income spent on these items is not taxed.
Taxable Income
Taxable Income is the amount of income on which tax must be paid.
Taxable Income = Gross Income - Allowable Tax Deductions
Tax Tables
Tax tables show how to calculate income tax for different tax brackets.
Calculating Income Tax
Medicare Levy
The Medicare Levy is an additional tax paid by income earners. The Levy is used to help fund the health system. The Levy is presently 2% of Taxable Income.
PAYG (Pay As You Go)
To avoid paying tax in one lump sum, tax is deducted every pay day from a person’s gross pay and is called Pay As You Go (PAYG) tax.
GST (Goods & Services Tax)
The Goods and Services Tax (GST) is a tax on spending. The GST is 10% of the cost of goods and services. In Australia, the prices of goods and services include the 10% GST.
Calculating the GST
Calculating the Price with GST Included
Calculating the Pre-GST Price
