MAT1793-ABED_1: Types of Payment

Constructing Knowledge

Employees can be paid in a number of ways. The following are some common ways of being paid: hourly wage, commission, piecework, and salary.

hourly wage: A certain amount of money is paid per hour of work. For example, a grocery store employee might be paid $10.25 per hour, with payment made every two weeks or at the end of each month.

salary: A fixed amount of compensation that is paid regularly for services. For example, a teacher is paid a salary according to a contract for all teachers in that school district. The yearly amount is divided into 12 equal cheques with each cheque payable at the end of each month.

commission: A fixed amount for every sale, or a percentage of every sale, is paid, either in addition to, or instead of wages or salary. For example, a saleswoman may be paid 10% of the value of everything she sells. Payment is typically made every two weeks or at the end of each month.

piecework: Work completed is calculated by the piece and paid for at a set rate per unit. For example, a berry picker is paid a fee for each basket of strawberries collected. Payment is typically made every two weeks or at the end of each month.

Given the unit rate of pay, you can make calculations to help plan your finances. Knowing the rate of pay for a job can help you to choose the type of part-time or full-time job to suit your financial needs.

Factors such as the number of hours worked, the number of overtime hours, and the rate of overtime pay all affect how much a person can earn at a job that pays by the hour.

Similarly, the more effective a person is at a task, the more money he can earn at a job that pays based on commission or piecework.