Acknowledgements (Opens in new window)

This course will help you manage your money. To do that you need to take a look at the money you earn, the money that is taken out of your paycheque through deductions, and the money you spend.

To balance the money coming in and the money going out you need a budget. As you work your way through the learning activities in this course, you will be prompted to add to a budget. The budget will be handed in at the end of the course. You will learn more about your budget at the end of this learning activity.

Video: “Gail Vaz-Oxlade talks about budgeting.”

Gail Vaz-Oxlade is a Canadian-Jamaican financial expert and television personality. From 2005-2016 she had a number of television programs discussing the money issues of Canadians who pool their household’s money together to share expenses. Watch as Gail Vaz-Oxlade talks about budgeting.

Gail explains the importance of having a budget and being honest about the money coming in and going out. She also says it is extremely important to track all your money. The first step in creating a budget is to know how much money is coming in and when.

Why is it important to use a budget? Refer to both the video clip and relevant examples from your own life.

Action

Types of pay

There are five main ways to get paid for work:

  • Hourly rate (with overtime)
  • Salary plus commission
  • Salary plus gratuities
  • Annual salary
  • Project rate

Think of an example of a job that would be paid using each of these remuneration methods.

Compare your thinking with the suggestions provided.

Hourly rate

An hourly rate is the amount an employee is paid for every hour of work done.

If your hourly rate is $20, how much would you make after 25 hours of work? Look at the suggested answers to confirm your solution. The suggested answers can also help guide you through how to find the answer to the question if you are stuck.


Hourly rate plus overtime

An overtime rate is the amount an employee is paid after a certain number of hours of work. In Ontario, regular pay is calculated up to 44 hours of work per week. After these 44 hours, an employee would be paid by the overtime rate. This overtime rate must be at least 1 1 2 (or 1.5) times the regular pay. This is often referred to as ‘time and a half’. There also may be different overtime rates of weekends and holidays.

Examples:

Take a look at some examples of calculating wages based on hourly and overtime rates. Remember to check your solutions with the suggested answers.

  1. Determine the overtime rate based on ‘time and a half’ for a person whose hourly rate is $20.
  1. Calculate the total pay for a person in Ontario who worked 53 hours in one week at an hourly rate of $16 per hour. This question has been broken down into steps that may help you organize the solution.

There will be 44 regular hours and 9 overtime hours.

Remember that 44 hours is the maximum number of regular hours allowed in Ontario. Note that the two types of hours (44 and 9) add to the total, 53 hours.

Overtime Rate =   1.5   ×   h o u r l y   r a t e

                                                  =   1.5   ×   $ 16

                                                  =   $ 2 4

Remember to multiply the rate with the number of hours for each.

Total regular pay =   r e g u l a r   h o u r s   ×   h o u r l y   r a t e

                                                        =   44   ×   $ 16

                                                        =   $ 70 4

Total overtime pay =   o v e r t i m e   h o u r s   ×   o v e r t i m e   r a t e

                                                              =   9   ×   $ 24

                                                              =   $ 216

Total pay =   t o t a l   r e g u l a r   p a y   +   t o t a l   o v e r t i m e   p a y

                                =   $ 704   +   $ 216

                                =   $ 92 0

The total pay for someone who works 53 hours a week at an hourly rate of $16 is $920.

Salary plus commission

Commission is the amount of money employees are paid based on the dollar value of their sales. It is stated as a percentage of the sales within a certain period (usually weekly or monthly).

A percent is a portion of 100. When you work with percent, convert the percent to a decimal by dividing the percent by 100. What would 25% of $60 be?

25   ÷ 100

=   0.25

Remember that ‘of’ in math means multiply so 25% ‘of’ $60 means 25% ‘multiplied’ by $60

0.25   ×   $ 60

=   $ 1 5

25% of $60 is $15

Example:

Go through an example of calculating wages on commission. Remember to check your solutions with the suggested answers.

Couple shopping at a furniture store

Yazmin (she/her) works in a furniture and appliance store and earns $15.50 per hour with 5% commission from sales. If she worked 30 hours in one week and sold merchandise worth $8000, what would her total pay be? This question has been broken down into steps that may help you organize the solution.

Remember to calculate this by multiplying the number of hours by the hourly rate.

Regular pay =   h o u r s   ×   h o u r l y   r a t e

                                          =   30   ×   $ 15.50

                                          =   $ 46 5

Remember you must first convert the percent to a decimal by dividing by 100

  5 %   ÷ 100

=   0.05

Commission =   0.05   ×   s a l e s

                                          =   0.05   ×   $ 8,000

                                          =   $ 40 0

Total pay =   r e g u l a r   p a y   +   c o m m i s s i o n  

                                =   $ 465   +   $ 400

                              =   $ 86 5

The total pay for Yazmin is $865

Salary plus gratuities

Gratuities are tips that a customer would pay for a service. Usually, the customer determines the amount of a tip. For example, in a restaurant, a tip of 15% - 20% is often suggested.

Example:

Investigate the following example in which wages are calculated to include gratuities. Remember to check your solutions with the suggested answers.

A hairdresser cutting a client's hair

Trayvon (they/them), a hairdresser, earns $18 per hour plus gratuities. If they work 35 hours per week and earns $160 in gratuities, what is their total pay for that week?

Remember that we calculate this by multiplying the number of hours by the hourly rate

Regular pay =   h o u r s   ×   h o u r l y   r a t e

                                          =   35   ×   $ 18

                                          =   $ 63 0

Total pay =   r e g u l a r   p a y   +   g r a t u i t i e s

                                =   $ 630   +   $ 160

                              =   $ 79 0

The total pay for Trayvon is $790

Annual Salary and Project Rate Problems

An annual salary is a fixed amount of money paid to a person for regular work. It is usually calculated on the basis of working 2,000 hours per year.

A project rate is a fixed amount of money for completing a project. Many people who work on contracts would be on a project rate. For example, a carpenter might be paid $200 to build a coffee table.

Example:

Go through an example of calculating wages based on a project rate. Remember to check your solutions with the suggested answers.

A person painting a wall with orange paint

Violet (she/her) has agreed to a contract to paint a large warehouse. The paint is supplied and the payment for the job is $1000. If it takes her 40 hours to finish the painting, what would she be earning per hour?

Try it!

Complete these practice questions on ways to earn money. You may want to work your answers out using a notebook either online or on paper.

  1. Determine the overtime rate for the following hourly rates. Select 'submit' before proceeding to the next question.
  1. Calculate the number of overtime hours for each week of work.
  1. Calculate 7% commission for the following sale amounts.

Pay schedules

As you’ve learned, there are different ways to get paid; there are also different pay schedules.

Some people receive their paycheques every week, some every two weeks, some twice per month, and some once per month. How often they receive their paycheque depends on the company’s policy and the payroll department.

Fill in the answers to the following questions and check your solutions with the suggested answers. If you don’t know an answer, the suggested responses can help you figure out how to find it.

Question 1:

If you are on a weekly pay schedule, how often would you receive a paycheque?

Question 2:

If you are on a weekly pay schedule, how many paycheques would you get in a year?

Question 3:

If you are on a biweekly pay schedule, how often would you receive a paycheque?

Question 4:

If you are on a biweekly pay schedule, how many paycheques would you get in a year?

Question 5:

If you are on a monthly pay schedule, how often would you receive a paycheque?

Question 6:

If you are on a monthly pay schedule, how many paycheques would you get in a year?

Question 7:

If you are on a twice a month pay schedule, how often would you receive a paycheque?

Question 8:

If you are on a twice per month pay schedule, how many paycheques would you get in a year?

Examples:

Try some examples of calculating wages based on payment schedules. Remember to check your solutions with the suggested answers.

A cashier handing a grocery bag to a shopper
  1. Bun (she/her) works in a department store as a cashier and earns $14.50 per hour. Each week she works 25 hours. What is her total pay for one paycheque if her pay is calculated biweekly?

Remember that biweekly means you work two weeks before you get a paycheque

Total hours =   h o u r s   p e r   w e e k   ×   n u m b e r   o f   w e e k s

                                      =   25   ×   2

                                        =   50

Pay =   T o t a l   h o u r s   ×   h o u r l y   r a t e

              =   50   ×   $ 14.50

              =   $ 725

The total pay is $725.

An artist painting a mural on a wall outdoors
  1. Arun (he/him) is an artist who paints attractive designs on outdoor walls. The Government of Ontario hires him to paint colourful designs on a wall at Ontario Place. The project is worth $6,600 and he has six months to complete the work. If Arun receives his pay monthly, what would his pay be each month?
  1. Emma (she/her) has just started working as a secretary for a small company. Her annual salary is $30,000. If she receives a paycheque twice per month, how much would she receive in each paycheque?

Remember getting paid twice per month, means 24 paycheques in a year.

Try it!

Complete these practice questions on payment schedules. You may want to work out your responses using a notebook either online or on paper.

Determine the total pay for each situation:

Consolidation

Each learning activity will end with a consolidation section where you will typically complete three tasks:

  • You will create a budget and add to it in each learning activity. This will be handed in at the end of Unit 4.
  • As a self-directed learner, you will reflect on your learning and plan for success.
  • You will have the opportunity for additional practice questions to support your learning.

First, let’s start with the Budget.

Case study: Creating a budget

In the Minds On, you explored a video on the importance of creating a budget. In order to create a budget, you must know how much money is coming in on each paycheque and when you’ll get paid. In addition, you will need to plan for your expenses.

You will be building your own budget throughout this course as a case study.

  • Your budget will be part of the culminating project for this course. It is worth 15% of your course mark and will be handed in at the end of Unit 4.
  • You will see this icon in almost each learning activity. This is when you should be adding to your budget template.
  • You will have the opportunity to hand in a draft of your budget for feedback from your teacher three times—in unit 1, unit 2 and unit 3.
  • Specific instructions in each learning activity will prompt you to add to your budget.
  • Use the template provided to ensure you include all required information.
  • Your work will be assessed using this rubric.

Success Criteria:

  • Interpret information about different types of remuneration
  • Demonstrate an understanding of payroll deductions and their impact on purchasing power
  • Demonstrate an understanding of the factors and methods involved in making and justifying informed purchasing decisions
  • Describe and compare services available from financial institutions
  • Demonstrate an understanding of simple and compound interest
  • Interpret information about different ways of borrowing and their associated costs and make and justify informed borrowing decisions.
  • Interpret information about owning and operating a vehicle
  • Plan and justify a route for a trip by automobile
  • Interpret information about different modes of transportation
Level 4
80-100%
Level 3
70-79%
Level 2
60-69%
Level 1
50-59%
With a high degree of effectiveness With considerable effectiveness With some effectiveness With limited effectiveness

Success Criteria:

  • Makes and justifies informed decision about each part of the budget
  • Budget always balances
Level 4
80-100%
Level 3
70-79%
Level 2
60-69%
Level 1
50-59%
With a high degree of effectiveness With considerable effectiveness With some effectiveness With limited effectiveness

Success Criteria:

  • Math notation is accurate and easy to follow
  • Explanations are communicated effectively
Level 4
80-100%
Level 3
70-79%
Level 2
60-69%
Level 1
50-59%
With a high degree of effectiveness With considerable effectiveness With some effectiveness With limited effectiveness

Success Criteria:

  • Solve problems and make decisions involving different remuneration methods
  • Demonstrate an understanding of payroll deductions and their impact on purchasing power
  • Demonstrate an understanding of the factors and methods involved in making and justifying informed purchasing decisions
  • Describe and compare services available from financial institutions
  • Solve problems involving related applications of simple and compound interest
  • Interpret information about different ways of borrowing and their associated costs and make and justify informed borrowing decisions.
  • Solve problems involving the associated costs of owning and operating a vehicle
  • Plan and justify a route for a trip by automobile, and solve problems involving the associated costs of planning a route for a trip by automobile
  • Interpret information about different modes of transportation, and solve related problems of different modes of transportation
Level 4
80-100%
Level 3
70-79%
Level 2
60-69%
Level 1
50-59%
With a high degree of effectiveness With considerable effectiveness With some effectiveness With limited effectiveness

Take a moment to download the template for “Creating a budget (Opens in new window)”. Keep it handy since your will be referring to it often. You should work on one copy of your “Creating a budget”.

Here is your first budget task.

Researching Jobs Requiring Math for Your Case Study

Some students may have a job. If this is true for you, you can use your payment information for this part of the case study. If you don’t, or are interested, you can research a job you would like in the future. When researching a job you may want to consider:

  • Future prospects
  • Pay
  • Education required
  • Interest in that field of work

Use the Government of Ontario’s website link to “Search job profiles.” (Opens in new window)

You can also take a career quiz that may help you get started. You can find out many different pieces of information about the job you’re researching.

When you feel comfortable with your chosen researched job, or using the information from your current job, fill out the corresponding part of your budget.

U1LA1 - Ways to Earn Money

Type of pay (hourly, salary with commission, salary with gratuities, annual salary, project rate,)

Annual Pay

Pay per month

Other considerations to mention









Review the success criteria

Self-check: Success Criteria

As a self-directed learner, you will be reflecting on your learning process and checking your understanding in each learning activity.This kind of reflection will help you plan for your success.

Rate your understanding from 1 – 5, where 1 = I am confused and 5 = I have a thorough understanding.

Agree or Disagree statements ranked 1 to 5
Statement 1 2 3 4 5
I can calculate and understand hourly rates, overtime rates, salaries, commissions, and gratuities.
I can calculate and understand payment schedules (weekly, biweekly, semi-monthly, monthly, etc.).

If you rated your understanding below 3, take some time now to think about how you will work to improve your rating where it is needed.

Additional practice

Notebook

In your notebook (online or on paper), answer the following questions if you would like to check your understanding of the skills featured in this learning activity. You can also refer back to these questions during your review at the end of the course. As you work through the following questions, check your answers with the suggested solutions.

For a job that pays a regular rate of $16 per hour

  1. In week 1, the number of hours worked is 48. What is the maximum number of hours that can be worked in a regular work week?

  1. How many overtime hours were worked in week 1?

  1. What is the total overtime pay for week 1?

  1. What is the total pay for week 1?
  1. In week 2, the number of hours worked was 54. What is the maximum number of hours that can be worked in a regular work week?

  1. How many overtime hours were worked in week 2?

  1. What is the total regular pay for week 2?

  1. What is the total overtime pay for week 2?

  1. What is the total pay for week 2?

  1. In week 3, the number of hours worked was 50. What is the maximum number of hours that can be worked in a regular work week?

  1. How many overtime hours were worked in week 3?

  1. What is the total regular pay for week 3?

  1. What is the total overtime pay for week 5?

  1. What is the total pay for week 3?

For a sales position that has a regular rate of $12.50 per hour and 4% commission of sales

  1. In week 1, the total number of hours worked was 25 and total sales was $3,000. What is the total regular pay earned in week 1?
  1. What is the total amount of commission pay earned in week 1?
  1. What is the total pay earned in week 1?
  1. In week 2, the total number of hours worked was 40 and total sales was $5,500.
    What is the total regular pay earned in week 2?
  1. What is the total amount of commission pay earned in week 2?
  1. What is the total pay earned in week 2?
  1. In week 3, the total number of hours worked was 32 and total sales was $4,800. What is the total regular pay earned in week 3?
  1. What is the total amount of commission pay earned in week 3?
  1. What is the total pay earned in week 3?

Help Ima Waitress

Ima is a waitress in a restaurant. Her salary is $14.00 per hour plus gratuities (tips). If Ima works 38 hours in a week and earns $255.00 in gratuities, what is her total pay for the week? Enter your own response, then check your answer with the one provided.

Help Ori Engineer

Ori is a computer software engineer. A bank has hired him to resolve some glitches in the new software the bank is using. He has agreed to complete the job for $5,000. If it takes Ori 100 hours to fix the problem and complete the project, what would his hourly rate be?

Which Job Pays More?

Determine which job pays more:

Job A: a sales position in a menswear retail store specializing in business clothes, such as suits, shirts, and jackets. The pay is $15 per hour and the position guarantees 40 hours each week. The company pays employees biweekly.

Job B: a sales position in women’s retail store specializing in casual wear, such as jeans, t-shirts, and blouses. The pay is $10 per hour plus 5% sales commission. The position guarantees 30 hours per week. The store location is very busy throughout the week and the sale clerk’s weekly sales are worth between $2,000 and $4,000 per week. Employees are paid weekly.

  1. Determine the salary for two weeks of job A. Work out your own response, then check your answer with the one provided.
  1. Determine the salary for two weeks of job B with $2,500 in sales each week. Work out your own response, then check your answer with the one provided.
  1. Determine the salary for two weeks of job B with $4,000 in sales each week. Work out your own response, then check your answers with those provided.
  1. Which job would you choose and why? Enter your own responses and then check your answers with those provided.

Discover More

Hourly Wages in Ontario

In 2018, the minimum wage in Ontario was $14/h. If a person is paid hourly, they must receive $14/h. If their pay includes commission or gratuities, their total pay must not be less than they would receive if they work the same number of hours at $14/h.

For more information about working in Ontario, do a search on “Ontario Minimum Wage” or to folllow the link to “Employment Standards in Ontario. (Opens in new window)