Lesson 1: Income - Bonuses

   Constructing Knowledge

Some employers will offer their employees bonus pay. Bonus pay can be paid whether an employee is getting paid an hourly wage, salary or some other type of pay.

Bonus pay
 A varied amount of money an employee may receive for reaching goals as an individual or as part of a company. This money is not guaranteed.

Advantages of Bonus Pay

  • You can earn more money than from just your regular payment structure.
  • It provides motivation to meet business goals.
  • There is a greater reward for hard work.

Disadvantages of Bonus Pay

  • It is difficult to know whether or not a bonus will be earned.
  • If bonuses depend on a company achieving a goal, your bonus is dependent on others working hard too.

EXAMPLE 1

In the Ultimate Fighting Championship, $50 000.00 bonuses are paid for "Fight of the Night", "Knockout of the Night" and "Submission of the Night". At UFC 167, George St. Pierre was paid a $400 000.00 fee for fighting, and earned a bonus for "Fight of the Night". How much money did George St. Pierre earn at UFC 167?

Solution


He would earn his fight fee and his "Fight of the Night" bonus.

total earnings = $400 000.00 + $50 000.00
= $450 000.00

George St. Pierre's total earnings for the night were $450 000.00.


Now, it is your turn! Complete the questions in your Chapter 1, Lesson 1 Practice Makes Perfect that refer to Hourly Pay.



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